Student Guidance Notes

Guide C02
September 2004

Guidance notes for students planning to sit

C02 Fundamentals of Financial Accounting of the
new 2006 CIMA Certificate in Business Accounting
syllabus

This guide outlines the issues relating to transition from C02 Financial Accounting
Fundamentals of the 2000 syllabus to CO2 Fundamentals of Financial Accounting of the
new 2006 CIMA Certificate in Business Accounting syllabus.

The first section of this guide compares the two syllabuses, highlighting the differences
between them.

The second part of this guide focuses on the assessment strategy for the new C02
Fundamentals of Financial Accounting exam.

The third part of this guide lists additional (or changed) learning outcomes in the new
syllabus.

If you have any further queries relating to this guide, please contact the CIMA Contact
Centre:

Telephone+ 44 (0)20 8849 2251

Email: cima.contact@cimaglobal.com

1 February 2006
 Syllabus Comparison
New syllabus Old syllabus Comparison and Comments

C02 Fundamentals C02 Financial

of Financial Accounting
Accounting Fundamentals
A. Conceptual and 2 (i) Conceptual and No material changes in learning outcomes but
Regulatory Framework Regulatory the terminology has been updated to reflect
- 20% Framework 20% that used in International Reporting Standards
(IFRS) (and IAS).

B. Accounting 2(ii) Accounting Unchanged.

Systems - 20% Systems 20%

C. Control of 2(iii) Control of Again the only change reflects the new terms
Accounting Systems - Accounting Systems seen in IFRS and IAS.
15% 15%

D. Preparation of 2(iv) Preparation of No material changes in learning outcomes but

Accounts for Single Accounts 45% now has the specific inclusion of impairment
Entities - 45% and statement of changes in equity.

Aims
These are expanded to require the student to:

• Prepare and interpret accounts for a single entity

• Interpret simple ratios.

In both cases the intention is clearly to require the student to demonstrate understanding and not
simply prepare accounts and ratios.

2 February 2006
 Assessment
There will be a computer based assessment (CBA) of 2 hours duration, comprising 50
compulsory questions, each with one or more parts.

The current paper requires a CBA of 90 minutes duration with 40 questions with one or more
parts.

A variety of objective test question types and styles will be used within the assessment. As well
as the conventional multiple choice format other possible styles include:

• filling in the blank in a sentence

• listing items in rank order
• stating a definition (in not more than __ words)
• identifying a key issue, for example advantage/ disadvantage (in not more than __
words)
• calculating one specific figure, for example profit for a period.
• completing a blank or partially completed prescribed format using terms and/or
numbers, for example an overhead cost table
• identifying points on a graph or diagram, for example a break even point
• identifying a specific term describing action/valuation seen in a scenario, for example
the conditions for a recession
• matching items together or with a description, for example “are the following cash or
non-cash items”
• interpreting numerical or graphical data.

For further information about computer based assessment please visit the website at
www.cimaglobal.com/cba

3 February 2006
 Learning Outcomes

Additional (or changed) learning outcomes

The following learning outcomes were either not included in the corresponding “old” syllabus
or have experienced a change:
• identify the various user groups which need accounting information and the qualitative
characteristics of financial statements;
• identify the underlying assumptions, policies and changes in accounting estimates;
• explain and distinguish capital and revenue, cash and profit, income and expenditure,
assets and liabilities
• identify the basic methods of valuing assets on current cost, fair value and value in use
bases, and their impact on profit measures and balance sheet values;
• explain the meaning of fair presentation
• explain the difference between bad debts and allowances for receivables;
• prepare accounts for bad debts and allowances for receivables;
• prepare accounts using each method of depreciation and for impairment values;
• prepare income statements, statement of changes in equity and balance sheets from
trial balance
• interpret basic ratios;

Transition Arrangements
Exams based on the CIMA Certificate in Business Accounting 2006 Syllabus, will be available
at CIMA approved CBA centres from 2 October 2006.

Exams based on the CIMA Certificate in Business Accounting 2000 Syllabus, will be available
at CIMA approved CBA centres until the 1 March 2007.

Exams based on the 2000 and 2006 Syllabus will be available concurrently between the 2
October 2006 and the 1 March 2007.

4 February 2006
 Conclusion

The paper shows little change in content other that it has been updated to include terms now
used in International Reporting Standards (IFRS) (and IAS). The aims have been adjusted to
emphasise the interpretation of both accounts for single entities and ratios.

The assessment however is longer (90 minutes to 2 hours) and has an increased number of
questions to be answered (40 to 50).

5 February 2006