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Knowledge
K1 — Financial Accounting
K1 Financial Accounting is the Knowledge-level successor to FA (F3). It covers the full scope of financial accounting for limited companies including the regulatory framework, company financial statements, consolidated financial statements (simple groups), interpretation, and a new Section G on digital technology in accounting. The sole-trader content moves down to F1.
FormatCBE · 2 hours · 100 marks
Pass Mark50%
Legacy PaperFA/FFA — Financial Accounting
Sections7 sections (A, B, C, D, E, F, G)
Current-syllabus equivalentOur paper mapping links K1 to FA — Financial Accounting. The current structure's last sitting is June 2027.
Transition Planner Exam Format
Section A: 35 × 2-mark OTs (70 marks) · Section B: 2 × 15-mark MTQs (30 marks) · 2 hours · 100 marks
Key Changes vs Legacy Paper
- Sole-trader content moved down to F1 Foundations
- Focus is now entirely on limited companies
- New Section G: Digital Technology in Accounting (AI, cloud, cybersecurity)
- Consolidation scope limited to single subsidiary and associates
- Same exam format as current FA: 35 OTs + 2 MTQs
Syllabus Comparison — FA/F3 → K1
| Change | Area / Topic | Detail |
|---|---|---|
| NEW SECTION | Partnerships (K1 Section H) | Entirely new section with 3 subsections. H1: partnership agreements — what a partnership is, purpose and content of a partnership agreement, appropriations of profits (salaries, interest on drawings, interest on capital, share of residual profit/loss). H2: partnership accounting records — differences between capital and current accounts, preparation of partners' capital and current general ledger accounts. H3: financial statements and changes — SFP and P&L for a partnership, admission of a new partner including treatment of goodwill arising (note: no goodwill calculations required). This content had no place in FA at any level. |
| NEW | Payroll (K1 C2) | New subsection within Recording transactions: calculate staff costs and employee deductions; prepare journal entries for payroll transactions. Not covered in FA at all. |
| RESTRUCTURED | Section A expanded to absorb FA Section B | FA had a standalone Section B (Accounting principles, concepts and qualitative characteristics). K1 absorbs this into Section A as A6 (key principles and concepts) and A7 (qualitative characteristics). The content is identical; only the section placement changes. All subsequent FA sections shift by one letter (FA C → K1 B; FA D → K1 C; etc.). |
| MOVED | Events after the reporting period | FA G4 placed events after the reporting period inside "Preparing financial statements." K1 C11 moves it into "Recording transactions and events." Content (adjusting vs non-adjusting; accounting treatment differences) is identical. |
| MERGED | Depreciation merged into tangible non-current assets (K1 C5) | FA treated tangible non-current assets (D4) and depreciation (D5) as separate subsections. K1 C5 combines them into "Tangible non-current assets and depreciation" — all acquisition, disposal, revaluation, depreciation and NCA register outcomes together. |
| MERGED | Correction of errors and suspense accounts merged (K1 E2) | FA F2 (Correction of errors) and F3 (Suspense accounts) were separate subsections. K1 E2 merges them into "Suspense accounts and the correction of errors." |
| EXPANDED | Reconciliations — now covers receivables AND payables (K1 D2) | FA E2 was "Payables account reconciliations" only. K1 D2 is "Receivables and payables reconciliations" — explicitly covers both trade receivables reconciliations to customer statements and trade payables reconciliations to supplier statements. |
| RENAMED | "Basic consolidated financial statements" → "Consolidated financial statements" (K1 G) | FA Section H was "Preparing basic consolidated financial statements." K1 Section G removes "basic" from the name. The consolidation content scope (subsidiaries, goodwill at full fair value, consolidated SFP and P&L, associates and equity method principle) appears unchanged. |
| RENAMED | "Finance costs" → "Interest expenses" (K1 C10) | FA D10 was "Capital structure and finance costs." K1 C10 is "Capital structure and interest expenses." Content appears equivalent. |
| EXAM CHANGE | Section B MTQ allocation made explicit | FA: Section B described as "two 15-mark multi-task questions — consolidations and accounts preparation." K1: explicitly one MTQ from Section F (individual financial statements) and one from Section G (consolidated financial statements). G MTQs may also include tasks from Section I (interpretation). The change makes the allocation unambiguous. |
| Retained | Core double-entry and recording content | Sales/purchases, cash, inventories (FIFO/AVCO), intangibles/amortisation, accruals/prepayments, provisions, capital structure, receivables/payables (irrecoverable debts, allowances) — all retained from FA with equivalent content. |
| Retained | Individual financial statements content | SFP, SPL&OCI, statement of cash flows (direct and indirect), disclosure notes, incomplete records techniques — all retained. |
| Retained | Interpretation (Section I) | Ratios (profitability, liquidity, efficiency, position), analysis — retained. I1 now explicitly adds "limitations" of financial statement analysis alongside importance and purpose. |
Syllabus Breakdown
A
The Context and Purpose of Financial Reporting
A1
Regulatory framework
- Identify the users of financial statements and their needs
- Understand the role of IASB, Conceptual Framework, IFRS and IAS
- Understand the regulatory framework and its purpose
B
The Qualitative Characteristics of Financial Information
B1
Qualitative characteristics
- Apply the fundamental characteristics: relevance, faithful representation
- Apply the enhancing characteristics: comparability, verifiability, timeliness, understandability
- Understand the cost constraint
C
The Use of Double-Entry and Accounting Systems
C1
Double-entry bookkeeping
- Record transactions using double-entry
- Maintain ledger accounts
- Prepare a trial balance and correct errors
- Prepare control accounts and reconciliations
D
Recording Transactions and Events
D1
Accounting for transactions
- Account for sales revenue, purchases and inventories (IAS 2)
- Account for tangible non-current assets (IAS 16) including depreciation
- Account for intangible assets (IAS 38)
- Account for provisions and contingencies (IAS 37)
- Account for events after the reporting period (IAS 10)
- Account for irrecoverable debts and allowance for receivables
- Account for accruals and prepayments
E
Preparing Financial Statements
E1
Single entity statements
- Prepare a statement of profit or loss and other comprehensive income
- Prepare a statement of financial position
- Prepare a statement of changes in equity
- Prepare a statement of cash flows (IAS 7) using indirect method
E2
Simple consolidated statements
- Prepare a consolidated statement of financial position (single subsidiary)
- Calculate goodwill on acquisition (IFRS 3)
- Account for non-controlling interest (NCI)
- Identify and account for associates using equity method (IAS 28)
F
Interpreting Financial Statements
F1
Ratio analysis
- Calculate and interpret profitability ratios
- Calculate and interpret liquidity ratios
- Calculate and interpret efficiency ratios
- Calculate and interpret gearing and investor ratios
- Assess the limitations of ratio analysis
G
Digital Technology in Accounting
G1
Technology in financial accounting
- Understand the role of technology in accounting systems
- Identify benefits and risks of cloud accounting
- Understand the use of AI and automation in accounting processes
- Identify cybersecurity risks and data protection issues