CIMA Managerial Level

FINANCIAL ACCOUNTING AND TAX

PRINCIPLES - Paper P7

Jan 2006

Business Management

Pillar

Management Accounting

Pillar

Financial Management

Pillar

Paper P4Organisational Management &

Information Systems

Paper P5Integrated

Management

Paper P1Management Accounting

Performance Evaluation

Paper P2Management Accounting

Decision Management

Paper P7Financial

Accounting & Tax Principles

Paper P8Financial Analysis

Paper P6Management AccountingBusiness Strategy

Paper P3Management Accounting

Risk & Control Strategy

Paper P9Management Accounting

Financial Strategy

Test of Professional Competence in Management Accounting

MANAGERIAL LEVEL

STRATEGIC LEVEL

CIMA SYLLABUS 2006

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CIMA SYLLABUS 2006

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Paper P7

Financial Accounting & Tax Principles

CIMAPaper P7

FINANCIAL ACCOUNTING AND TAX PRINCIPLESExamination Structure -

Section A - 50 marks

• Variety of objective test questions: multiple choice questions; complete the

sentence; calculate a value; definition in a fixed number of words; list

• Each question worth between 2 and 4 marks

Section B – 30 marks

• Six compulsory questions worth 5 marks each

• A short scenario may be used which could relate to several questions

Section C – 20 marks

• A choice of one question from two

• Mainly numerical questions

• At least one will be preparation of financial statements

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Paper 7

Financial Accounting &

Tax Principles

Principles of Business Taxation

(20%)

Single Company Financial Accounts

(45%)

Managing Short Term Finance

(25%)

Principles of Regulation of

Financial Reporting

(10%)

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Employee taxation

Sources of tax rules

Direct taxes on company profits and gains

Tax concepts

Tax avoidance and tax evasion

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International taxation

Record keeping, deadlines and payments

Indirect taxes collected by the company

Principles of Business Taxation

(20%)

IAS 12 accounting and disclosurerequirements

Short-term finance & principles of short-terminvestment

Working capital characteristics

Cash-flow forecasts and changing variables

Working capital ratios & working capital cycle

Age analyses of balances and establishingcollection targets

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Managing Short Term Finance

(25%)

Purchasing and stock control; EOQ

Baumol & Miller-Orr models

Payment terms and settlement discounts

The credit cycle and the payment cycle

Export finance

Inventories IAS 2. • Related parties, IAS 24.

Reporting performance; IASs 1; 8, 14, 18 & 35

Tangible non-current assets, IAS 16. • Intangible non-current assets IAS 38. • Impairment of assets IAS 36

Preparation of cash flow statements

Preparation of financial statements of a singlecompany, including statement of changes inequity

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Single Company Financial Accounts

(45%)

Issue and redemption of shares, IAS 32 and IAS 39

Construction contracts IAS 11 and IAS 23.•Post balance sheet events IAS 10.•Provisions & contingencies IAS 37 •Leases(lessee only) IAS 17

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Need for regulation of accounts

External audit

Process of developing an IAS

Ways in which IASs are used

Principles of Regulation of

Financial Reporting

(10%)

IASB’s Framework

Role and structure of IASB and IOSCO

GAAP based on prescriptive v principlesbased standards

Elements in a regulatory framework