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Teacher Resource Bank

GCE Accounting Other Guidance Overview of IAS changes for the examination in 2010 and onwards

Copyright 2009 AQA and its licensors. All rights reserved. The Assessment and Qualifications Alliance (AQA) is a company limited by guarantee registered in England and Wales (company number 3644723) and a registered charity (registered charity number 1073334). Registered address: AQA, Devas Street, Manchester M15 6EX. Dr Michael Cresswell, Director General.

Teacher Resource Bank / GCE Accounting / Other Guidance: Overview of IAS examination changes / Version 1.0

AQA GCE Accounting Specification 2120 Overview of International Accounting Standards (IAS) changes for the examinations in 2010 and onwards This document is intended to clarify how the GCE Accounting specification and assessment units will be affected by the international accounting standards. It has been prepared in response to requests from teachers and centres for more guidance about this development. It is recognised that new terminology is being used by public limited companies, but is also beginning to be used by a wider range of business organisations, including private limited companies, sole traders and partnerships. The changes outlined below will come into effect in mark schemes for the first time in the January 2010 examination, and in the specification and in assessment units (ie question papers) starting with the June 2010 examination. AS Accounting Unit 1 It is apparent that many sole traders are now beginning to use some of the terminology which is embodied in the international accounting standards. As a result, it has been decided that for the next few years dual terminology will be used in the specification, assessment units and mark schemes for this unit. As a result candidates who are familiar with either the old or the new terms will not be disadvantaged when using the specification or answering examination questions.

Term Fixed asset Stock Debtors Creditors Long-term liability Trading and profit and loss account Final accounts and balance sheets Net profit

How term will appear in the specification, assessment units and mark scheme Non-current assets (fixed assets) Inventory (stock) Trade receivables (debtors) Trade payables (creditors) Non-current liability (long-term liability) Income statement (trading and profit and loss account) Financial statements (final accounts and balance sheets) Profit (net profit)

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Copyright 2009 AQA and its licensors. All rights reserved.

Teacher Resource Bank / GCE Accounting / Other Guidance: Overview of IAS examination changes / Version 1.0

Unit 2 The same approach (dual terminology) will be used for this unit. Furthermore, as limited companies are no longer required to prepare profit and loss appropriation accounts, this financial statement will no longer be examined. Instead candidates will be expected to be familiar with, and able to prepare, Statements of changes in equity. Candidates will also be expected to know that only dividends paid during a year are recorded in financial statements. The treatment of corporation tax is unaffected by these changes. The Teachers Resource Bank now includes Support for Teachers ACCN2 update on IAS to help with these changes. It contains examples of an income statement, a balance sheet and a statement of changes in equity. In addition, it has a glossary of ratios showing any changes in terminology. A2 Accounting Units 3 and 4 Dual terminology will be used in the specification, assessment units and mark schemes for both these units. There is already detailed guidance on the international accounting standards to be found in the teachers resource bank to help with this topic in Unit 3. In Unit 4, dual terminology will apply to the preparation of manufacturing accounts. It will also affect some budgets: Production budget Debtors budget Creditors budget Forecast final accounts Will include references to inventory (stock) Trade receivables (debtor) budget Trade payables (creditor) budget Forecast financial statements

Notes 1. Please note that the terms creditor, debtor, stock, etc are not obsolete. They will still be used in certain situations. For example, the old terms will still be used when referring to an individual customer, individual supplier and to stocktaking. The new terms are principally designed for use in financial statements. 2. Dual terminology will not be used in questions which are about the affairs of a public limited company.

Further help The Teacher Resource Bank includes the following documents: 2 Additional sample questions and mark schemes (showing the use of dual terminology) Support For Teachers - ACCN2 Update on IAS IAS Guidance Version 1.2 IAS Terminology Version 1.1
Copyright 2009 AQA and its licensors. All rights reserved.

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