ACCA Applied Skills study guide
Every chapter of all four papers, broken into 851 topics. Each topic shows the concept, a step-by-step way to solve questions, the quickest method for the exam, the mistakes students make and worked examples.
Paper LW: Corporate and Business Law (Global)
Objective, MCQ · 18 chaptersIntroduction to the UN Convention on Contracts for the International Sale of Goods and ICC Incoterms
Insolvency and administration
- Corporate Insolvency Basics and Insolvency Tests
- Liquidation: Compulsory and Voluntary Winding Up
- Role and Duties of the Liquidator
- Order of Payment of Creditors in Liquidation
- Administration and Administrators
- Antecedent Transactions: Voidable Transactions
- Fraudulent and Wrongful Trading and Director Disqualification
- Company Voluntary Arrangements and Receivership
Paper M: Performance Management
Subjective, written · 24 chaptersAccounting for environmental and sustainability factors
- Environmental Management Accounting (EMA) Overview
- Categories of Environmental Costs
- Identifying and Allocating Environmental Costs
- Input/Output Analysis and Material Flow Cost Accounting
- Activity-Based Costing and Life Cycle Costing for Environmental Costs
- Sustainability Reporting and the Triple Bottom Line
Budgetary systems and types of budget
- Purposes and Objectives of Budgeting
- Budget Preparation Process and Principal Budget Factor
- Budgeting Approaches: Incremental, Zero-Based and Activity-Based
- Fixed, Flexible, Rolling and Continuous Budgets
- Participative, Imposed and Negotiated Budgeting Styles
- Incremental, Beyond Budgeting and Other Budget Models
- Quantitative Techniques: Forecasting, High-Low and Learning Curve
Standard costing
- Standard Costing Basics and Types of Standards
- Material Price and Usage Variances
- Labour Rate, Efficiency and Idle Time Variances
- Variable and Fixed Overhead Variances
- Sales Price and Sales Volume Variances
- Operating Statements and Reconciling Budget to Actual Profit
- Mix and Yield Variances
- Interpreting Variances and Planning and Operational Variances
Paper TX: Taxation (UK)
Subjective, written · 32 chaptersThe time limits for the submission of information, claims and payment of tax, including payments on account
- Income Tax Filing Deadlines and Payments on Account
- Interest and Penalties for Late Payment and Filing
- Corporation Tax Returns, Payment Dates and Quarterly Instalments
- Claims, Elections and Record Keeping Time Limits
- Capital Gains Tax and Inheritance Tax Payment and Reporting Dates
- VAT Returns, Payment Deadlines and Default Penalties
Income from self-employment
- Badges of Trade and Trading Income
- Adjustment of Profits for Tax Purposes
- Capital Allowances: AIA, WDA and FYA
- Basis of Assessment and Opening Years Rules
- Closing Year Rules and Cessation of Trade
- Trading Losses for Sole Traders
- Partnerships and Profit Sharing
- Class 4 and Class 2 National Insurance Contributions
The comprehensive computation of taxable income and income tax liability
- Income Tax Computation Format and Types of Income
- Personal Allowance and Its Restriction
- Income Tax Rates, Bands and Order of Taxation
- Gift Aid, Pension Contributions and Band Extension
- Cap on Income Tax Reliefs and Loss Relief Deductions
- Child Benefit Income Tax Charge
- Marriage Allowance, Married Couples and Tax Reducers
- Tax Payable, Payments on Account and Interest
The use of exemptions and reliefs in deferring and minimising income tax liabilities
- Tax Planning Principles: Avoidance vs Evasion
- Making Full Use of Personal Allowance and Income Tax Bands
- Child Benefit Income Tax Charge
- Pension Contributions and Annual Allowance
- Tax-Efficient Investments: ISAs, EIS, SEIS and VCT
- Cap on Income Tax Reliefs
- Trading Loss Relief and Choosing the Best Relief
- Tax Planning for Business Owners and Inheritance Tax Reliefs
Gains and losses on the disposal of shares and securities
- Share Matching Rules for Individuals
- Section 104 Share Pool Calculations
- Bonus Issues and Rights Issues
- Gilt-Edged Securities and Qualifying Corporate Bonds
- Takeovers and Reorganisations of Share Capital
- Business Asset Disposal Relief and Investors' Relief on Shares
- Losses on Shares and Negligible Value Claims
The use of exemptions and reliefs in deferring and minimising tax liabilities arising on the disposal of capital assets
- Exempt Assets and the Annual Exempt Amount
- Principal Private Residence Relief
- Business Asset Disposal Relief and Investors' Relief
- Gift Holdover Relief
- Rollover Relief on Replacement of Business Assets
- Incorporation Relief and Share Reorganisations
- Capital Losses and Loss Relief Planning
- Tax Planning for Disposals: Spouses, Timing and Payment
The liabilities arising on chargeable lifetime transfers and on the death of an individual
- IHT Nil Rate Band and Tax Rates
- Residence Nil Rate Band and Transfer of Unused Bands
- Chargeable Lifetime Transfers and Lifetime IHT Calculation
- Potentially Exempt Transfers and Taper Relief
- IHT Calculation on Death and the Death Estate
- IHT Payment Dates and Who Is Liable to Pay
- Interaction of IHT with Capital Gains Tax and ISAs
Taxable total profits
- Corporation Tax Basics and Chargeable Accounting Periods
- Adjusted Trading Profit and Capital Allowances
- Property Business, Interest and Other Income
- Chargeable Gains for Companies
- Qualifying Charitable Donations and Dividend Income
- Corporation Tax Rates and Marginal Relief
- Short Periods and Quarterly Instalment Payments
Chargeable gains for companies
- Chargeable Gains for Companies: Basic Computation
- Indexation Allowance for Companies
- Chargeable Gains: Part Disposals and Chattels
- Chargeable Gains: Shares and Securities
- Chargeable Gains: Capital Losses and Reliefs
- Rollover Relief for Replacement of Business Assets
- Gains Within a Group of Companies
- Capital Allowances Interaction with Company Disposals
The comprehensive computation of corporation tax liability
- Corporation Tax Computation Format and Chargeable Profits
- Accounting Periods and Long Periods of Account
- Loan Relationships and Qualifying Charitable Donations
- Dividends Received and Taxable Total Profits
- Corporation Tax Rates and Marginal Relief
- Associated Companies and Limit Adjustments
- Quarterly Instalment Payments for Large Companies
- Corporation Tax Payment Dates and Interest on Late Tax
The use of exemptions and reliefs in deferring and minimising corporation tax liabilities
- Chargeable Gains for Companies and Indexation
- Substantial Shareholding Exemption
- Rollover Relief on Business Assets
- Capital Losses and Group Relief for Gains
- Trading Loss Reliefs for Companies
- Group Relief and Corporation Tax Groups
- Intangible Assets, R&D and Other Company Reliefs
- Planning to Defer and Minimise Corporation Tax
Paper FR: Financial Reporting
Subjective, written · 22 chaptersThe concepts and principles of groups and consolidated financial statements
- Group Structures: Subsidiaries, Associates and Investments
- Consolidated Statement of Financial Position Basics
- Goodwill and Non-Controlling Interest
- Fair Value Adjustments and Pre/Post-Acquisition Reserves
- Intra-Group Trading and Unrealised Profit
- Consolidated Statement of Profit or Loss and OCI
- Accounting for Associates: Equity Method
Financial instruments
- Financial Instruments Definitions and Classification
- Initial Recognition and Measurement of Financial Instruments
- Financial Liabilities at Amortised Cost and Effective Interest
- Financial Assets: Amortised Cost, FVOCI and FVPL
- Convertible Debt and Compound Instruments
- Impairment of Financial Assets (Expected Credit Losses)
Reporting financial performance
- IFRS 15 Revenue from Contracts with Customers
- IAS 1 Presentation of Financial Statements
- IAS 8 Accounting Policies, Estimates and Errors
- IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
- IAS 10 Events After the Reporting Period
- IAS 37 Provisions, Contingent Liabilities and Assets
- IAS 33 Earnings Per Share
Preparation of consolidated financial statements for a simple group
- Group Structure, Control and Consolidation Principles
- Consolidated Statement of Financial Position
- Goodwill and Fair Value Adjustments at Acquisition
- Intragroup Trading and Unrealised Profit
- Consolidated Statement of Profit or Loss and OCI
- Consolidated Retained Earnings and Post-Acquisition Reserves
- Accounting for Associates: Equity Method
Paper AA: Audit and Assurance
Subjective, written · 28 chaptersAudit planning and documentation
- Preliminary Engagement Activities and Engagement Letters
- Understanding the Entity and Its Environment
- Audit Strategy and Audit Plan
- Materiality and Performance Materiality
- Audit Risk and Risk of Material Misstatement
- Analytical Procedures in Planning
- Fraud, Laws and Going Concern at Planning Stage
- Audit Documentation
Systems of internal control
- Internal Control Systems and Their Components
- Control Environment and Corporate Governance Basics
- Control Activities and Types of Control
- Information Systems and IT Controls
- Internal Audit Function and Monitoring of Controls
- Evaluating Controls: Deficiencies and Reporting
- Documenting and Testing Systems; Tests of Control
The use and evaluation of systems of internal control by auditors
- Internal Control Systems and Components
- Understanding the Entity's Internal Controls
- Control Activities and Control Procedures
- Evaluating Deficiencies and Reporting to Management
- Tests of Controls and Substantive Procedures
- Internal Controls in Computerised Environments
- Internal Audit and Governance Aspects of Control
Internal audit and governance and the differences between external audit and internal audit
- Corporate Governance Principles and Codes
- Audit Committee and Non-Executive Directors
- Internal Audit Function and Its Role in Governance
- Need for Internal Audit and Factors Affecting It
- Types of Internal Audit Assignments
- Differences Between External and Internal Audit
- Internal Audit Independence and Reporting
Audit procedures
- Audit Procedures and Methods of Obtaining Evidence
- Sufficient Appropriate Audit Evidence
- Financial Statement Assertions and Evidence
- Tests of Controls and Substantive Procedures
- Audit Sampling and Selecting Items for Testing
- Analytical Procedures
- Audit Documentation and Working Papers
- Computer-Assisted Audit Techniques and Automated Tools
The Independent Auditor's Report
- Purpose and Structure of the Auditor's Report
- Unmodified and Modified Audit Opinions
- Material Misstatement vs Inability to Obtain Evidence
- Key Audit Matters
- Emphasis of Matter and Other Matter Paragraphs
- Going Concern and Material Uncertainty in the Report
- Other Information and Auditor's Report Responsibilities
Paper FM: Financial Management
Subjective, written · 27 chaptersFinancial objectives and relationship with corporate strategy
- Nature and Purpose of Financial Management
- Shareholder Wealth Maximisation and Financial Objectives
- Other Corporate Objectives and Stakeholder Conflicts
- Agency Problem and Aligning Management Goals
- Financial Ratios for Measuring Corporate Performance
- Not-for-Profit Organisations and Value for Money
- Financial Objectives and Corporate Strategy
Investment appraisal techniques
- Relevant Cash Flows for Investment Appraisal
- Payback Period and Discounted Payback
- Return on Capital Employed (ARR)
- Net Present Value (NPV)
- Internal Rate of Return (IRR)
- Discounted Cash Flow Annuities and Perpetuities
- Capital Rationing and Profitability Index
- Equivalent Annual Cost and Replacement Decisions
Sources of finance and their relative costs
- Equity Finance and Share Issues
- Debt Finance, Bonds and Loan Notes
- Hybrid Finance and Convertibles, Preference Shares
- Leasing and Short-Term Finance Sources
- Venture Capital, Islamic Finance and Other Sources
- Cost of Equity: Dividend Valuation and CAPM
- Cost of Debt, Preference Shares and Convertibles
- Weighted Average Cost of Capital (WACC)
Nature and purpose of the valuation of business and financial assets
- Reasons for Valuing Businesses and Shares
- Asset-Based Valuation Methods
- Market-Based Valuation: P/E and Earnings Yield
- Dividend Valuation Model and Dividend Growth
- Cash Flow Based Valuation (DCF and Free Cash Flow)
- Valuing Debt, Preference Shares and Other Financial Assets
- Efficient Market Hypothesis and Valuation
Models for the valuation of shares
- Business Valuation Basics and Valuation Approaches
- Asset-Based Valuation Models
- Market-Based Valuation: P/E Ratio and Earnings Yield
- Dividend Valuation Model and Dividend Growth
- Cash Flow Based Valuation and Free Cash Flow to Equity
- Efficient Market Hypothesis and Share Price Behaviour
- Comparing Valuation Models and Their Limitations