Drafting Financial Statements (accounting practice, industry and commerce)
Unit summary
This unit is about drafting and interpreting financial statements of limited companies. The first learning outcome in this unit is about drafting limited company year-end financial statements from a trial balance. You are responsible for ensuring that the financial statements comply with any relevant domestic legislation and either the relevant UK standards (Statements of Standard Accounting Practice, Financial Reporting Standards and other relevant pronouncements) or the International Accounting Standards. You also need to show that you ensure that confidentiality procedures are followed. The second learning outcome requires you to interpret the financial statements of companies and the relationships between the elements using ratio analysis.
Unit details
-
15 Business, Administration and Law
-
15.1
Accounting and Finance
Assessment Methodology: Independent assessment of at least 3 hours duration is mandatory for this unit OR, if NVQ, work-based evidence
You must have knowledge and understanding of:
The Business Environment
1. The elements and purposes of financial statements of limited companies as set out in the conceptual framework for financial reporting (LO 11.2)
2. The general legal framework of limited companies and the obligations of Directors in respect of the financial statements (LO 11.1)
3. The statutory form of accounting statements and disclosure requirements (LO 11.1)
4. The UK regulatory framework for financial reporting and the main requirements of relevant Financial Reporting Standards
or
5. The relevant requirements of the International Accounting Standards (LO 11.1)
6. The forms of equity and loan capital (LO 11.1)
7. The presentation of Corporation Tax in financial statements (LO 11.1)
Accounting Techniques
8. Preparing financial statements in proper form (LO 11.1)
9. Analysing and interpreting the information contained in financial statements (LO 11.2)
10. Computing and interpreting accounting ratios (LO 11.2)
Accounting Principles and Theory
11. Generally accepted accounting principles and concepts (LO 11.1)
12. The general principles of consolidation (LO 11.1)
The Organisation
13. How the accounting systems of an organisation are affected by its roles, organisational structure, its administrative stystems and procedures and the nature of its business transactions (LOs 11.1, 11.2)
Simple Merge:
NOS: Based on AOSG Level 4 in Accounting Unit 11
Other: no text found
FSSC have formally supported this qualification (please see letter of support attached in the qualification need / support section).
| Learning Outcome |
Assessment Criteria |
| 1. Draft limited company financial statements |
11.1.A Draft an income statement for a limited company from the appropriate information
11.1.B Draft a balance sheet for a limited company from the appropriate information
11.1.C Draft a cash flow statement (not consolidated) for a limited company from the appropriate information
11.1.D Draft a statement of total recognised gains and losses for a limited company from the appropriate information
11.1.E Draft the supplementary notes for a limited company required by statute from the appropriate information
11.1.F Draft a consolidated income statement for a limited company from the appropriate information
11.1.G Draft a consolidated balance sheet for a limited company from the appropriate information
11.1.H Correctly identify and implement subsequent adjustments and ensure that discrepancies, unusual features or queries are identified and either resolved or referred to the appropriate person
11.1.I Ensure that limited company financial statements comply with relevant Statements of Standard Accounting Practice (SSAP) or International Accounting Standards
11.1.J Ensure that limited company financial statements comply with relevant Financial Reporting Standards (FRS) and other relevant pronouncements or International Accounting Standards
11.1.K Ensure that limited company financial statements comply with the Companies Act and with the organisation's policies, regulations and procedures
11.1.L Prepare and interpret a limited company cash flow statement
11.1.M Ensure that confidentiality procedures are followed at all times |
| 2. Interpret limited company financial accounts |
11.2.A Identify the general purpose of income statements used in limited companies
11.2.B Identify the general purpose of balance sheets used in limited companies
11.2.C Identify the assets within financial statements used in limited companies
11.2.D Identify the liabilities within financial statements used in limited companies
11.2.E Identify the ownership interest within financial statements used in limited companies
11.2.F Identify the gains within financial statements used in limited companies
11.2.G Identify the losses within financial statements used in limited companies
11.2.H Identify the contribution from owners within financial statements used in limited companies
11.2.I Identify the distribution to owners within financial statements used in limited companies
11.2.J Identify the profitability relationship between elements within financial statements of limited companies
11.2.K Identify the liquidity relationship between elements within financial statements of limited companies
11.2.L Identify the efficient use of resources relationship between elements within financial statements of limited companies
11.2.M Identify the financial position relationship between elements within financial statements of limited companies
11.2.N Interpret the relationship between elements of limited company financial statements using ratio analysis
11.2.O Identify unusual features or significant issues within financial statements of limited companies
11.2.P Draw valid conclusions from the information contained within financial statements of limited companies
11.2.Q Present issues, interpretations and conclusions clearly to the appropriate people |