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Expertise
E2 — Financial Reporting
E2 Financial Reporting succeeds FR (F7) at the Expertise level. It covers the regulatory framework, preparation and presentation of financial statements for single entities and groups, analysis and interpretation, and a new focus on sustainability reporting. Group accounting scope is expanded to include complex groups.
FormatSession CBE · 3 hours · 100 marks
Pass Mark50%
Legacy PaperFR (F7) — Financial Reporting
Sections5 sections (A, B, C, D, E)
Current-syllabus equivalentOur paper mapping links E2 to FR — Financial Reporting. The current structure's last sitting is June 2027.
Transition Planner Exam Format
Section A: 15 × 2-mark OTs (30 marks) · Section B: 3 × 10-mark MTQs (30 marks) · Section C: 2 × 20-mark constructed response (40 marks) · 3 hours
Key Changes vs Legacy Paper
- New Section E: Sustainability Reporting (IFRS S1, IFRS S2, integrated reporting)
- Group accounting expanded to include complex structures and mid-year disposals
- IFRS 16 Leases included (was added to FR syllabus recently)
- Exam format moves to session CBE with constructed response questions
Syllabus Comparison — FR/F7 → E2
| Change | Area / Topic | Detail |
|---|---|---|
| ADDED | IFRS S2 Climate-related Disclosures (E2 C1b) | FR had no IFRS S2 coverage. E2 adds a standalone outcome: summarise objective, scope and core content of IFRS S2 [1]. |
| ADDED | Double materiality vs financial materiality (E2 C1c) | New to the ACCA qualification at this level. E2 requires comparison of financial materiality under IFRS SDS with double materiality under ESRS [2]. No equivalent in FR. |
| ADDED | ACCA Code of Ethics applied to financial reporting (E2 C2a) | FR had no ethics component. E2 explicitly requires application of the ACCA Code to identify and analyse ethical issues in financial reporting, including the going concern assumption [2]. |
| ADDED | Fair value hierarchy — IFRS 13 (E2 A3) | FR did not include the fair value hierarchy as a standalone outcome. E2 Section A3 requires application of the three-level hierarchy when measuring asset fair values [2]. |
| MOVED + EXPANDED | IFRS S1 General Requirements | In FR, IFRS S1 was embedded at [1] level inside B9 (reporting financial performance). In E2 it moves to a dedicated Section C alongside IFRS S2, double materiality, and ethics — elevated from a single embedded outcome to the paper’s own thematic section. |
| MOVED + EXPANDED | IASB vs ISSB comparison | In FR, the ISSB’s purpose and role was one outcome within Section A3 (regulatory framework) at [2]. In E2 it becomes the lead topic of Section A (A1), explicitly comparing the two bodies’ purpose, role and objectives as a standalone [2] outcome. |
| RESTRUCTURED | Group concepts (FR A4 → E2 D2) | FR Section A4 had 9 outcomes covering group theory (subsidiary definition, consolidation criteria, exemptions, coterminous periods, intragroup elimination rationale, associate and equity method). E2 streamlines to 3 outcomes and moves them into Section D rather than Section A. |
| RESTRUCTURED | Analysis / interpretation section (FR Section C → E2 Section E) | FR had a 4-subsection Section C covering limitations of FS, ratio calculation and interpretation, limitations of interpretation techniques, and NFP/public sector. E2 replaces all of this with a single 2-outcome Section E covering ratio impact assessment and comparative analysis. All limitations, stakeholder perspectives, policy change effects, and NFP content are gone. |
| RESTRUCTURED | Performance reporting topics (FR B9 → E2 B15, B16, B17) | FR combined discontinued operations, IAS 8, and EPS into one omnibus B9 topic. E2 gives each its own B-section entry: B15 (IFRS 5), B16 (IAS 8 / basis of preparation), B17 (EPS) — same scope but cleaner separation. |
| REMOVED | Not-for-profit and public sector entities (FR C4) | FR required knowledge of how financial statement interpretation differs for NFP and public sector entities. This topic is entirely absent from E2. |
| REMOVED | Limitations of financial statements (FR C1) | FR C1 covered FS manipulation, seasonal trading distortion, acquisition timing effects on SFP figures, and how consolidated FS limit interpretation. Not in E2. |
| REMOVED | Limitations of interpretation techniques (FR C3) | FR C3 covered ratio analysis limitations, the effect of accounting policy changes on comparability, the usefulness of SCF vs P&L, and EPS trend limitations. Not in E2. |
| REMOVED | Factoring of receivables (FR B5c) | Explicitly listed in FR’s financial instruments section as a standalone learning outcome. Absent from E2’s IFRS 9 coverage. |
| REMOVED | Revenue: repurchase agreements, bill-and-hold, consignment (FR B10e) | FR required knowledge of four specific revenue transaction types (principal/agent, repurchase agreements, bill-and-hold, consignment arrangements). E2 retains principal vs agent only — the other three are removed. |
| REMOVED | Employability and technology skills (FR Section E) | FR had a formal Section E with 4 technology and employability outcomes. E2 has no equivalent section — Section E in E2 is financial analysis. |
| REDUCED | Deferred tax (FR B8 → E2 B9) | FR required accounting for current tax and deferred tax on all taxable and deductible temporary differences (IAS 12 in full). E2 restricts deferred tax to PPE and tax losses carried forward only. Temporary differences arising from leases, provisions, share-based payments, and other items are out of scope in E2. |
| REDUCED | Employee benefits (FR → E2 B13) | FR covered short-term benefits, defined contribution plans, and defined benefit plans in full (net DB liability/asset, current and past service cost, net interest, actuarial gains/losses in OCI, settlement and curtailment). E2 retains short-term benefits and defined contribution only. Defined benefit accounting is entirely removed. |
| REDUCED | Conceptual framework detail (FR A1/A2 → E2 A1/A2) | FR A1/A2 had extensive coverage of qualitative characteristics (fundamental and enhancing), elements of financial statements, recognition criteria for all elements, and four measurement bases in depth. E2 assumes this from K1 — Section A reduces to IASB/ISSB comparison, a broad measurement basis assessment, and the fair value hierarchy. |
| Retained | Core IFRS accounting standards | IAS 16 (PPE), IAS 23 (borrowing costs), IAS 40 (investment property), IFRS 16 (leases — lessee), IAS 20 (government grants), IAS 38 (intangibles), IAS 36 (impairment), IFRS 9 (financial instruments — classification and measurement), IAS 2 (inventories), IAS 41 (agriculture), IAS 37 (provisions), IAS 10 (events after reporting period), IFRS 15 (revenue — 5-step model), IAS 21 (FX transactions and monetary items), IFRS 5 (NCA held for sale and discontinued operations), IAS 8 (policy/estimate changes and errors), IAS 33 (EPS basic and diluted). |
| Retained | Group accounts scope | Both papers cover up to 2 subsidiaries + 1 associate; consolidated SFP and P&L OCI; goodwill including bargain purchase; NCI; intragroup eliminations; full disposal of subsidiary. Scope unchanged. |
| Retained | Exam format | Identical: 3-hour session CBE; Section A 15 × 2-mark OTs; Section B 3 × 10-mark case questions; Section C 2 × 20-mark CRQs; 100 marks total; 50% pass mark. |
Syllabus Breakdown
A
The Financial Reporting Framework
A1
Regulatory framework
- Understand the role of the IASB and IFRS Foundation
- Apply the Conceptual Framework for Financial Reporting
- Understand the standard-setting process
B
Accounting for Transactions in Financial Statements
B1
Application of accounting standards
- Apply IAS 2 Inventories, IAS 16 PPE, IAS 38 Intangible Assets
- Apply IAS 36 Impairment, IAS 37 Provisions, IAS 10 Events After Reporting Period
- Apply IFRS 15 Revenue, IFRS 16 Leases
- Apply IAS 12 Income Taxes, IAS 19 Employee Benefits
- Apply IFRS 9 Financial Instruments (basic)
- Apply IAS 21 Foreign Currency Transactions
C
Preparing Financial Statements
C1
Single entity statements
- Prepare a complete set of financial statements for a single entity
- Prepare a statement of cash flows using indirect method
C2
Consolidated financial statements
- Prepare consolidated statement of financial position
- Prepare consolidated statement of profit or loss and OCI
- Account for goodwill, NCI, associates and joint ventures
- Account for mid-year acquisitions and disposals
- Account for complex group structures
D
Analysing and Interpreting Financial Statements
D1
Analysis and interpretation
- Calculate and interpret key financial ratios
- Analyse financial performance and position
- Assess the limitations of financial analysis
- Understand the impact of accounting policies on reported results
E
Sustainability Reporting
E1
Sustainability
- Understand the development of sustainability reporting standards
- Understand IFRS S1 and IFRS S2 sustainability disclosure standards
- Identify the relationship between financial and sustainability reporting
- Understand integrated reporting