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    Bridging Document Igcse Accounting 1

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    Khaled Turk
    This document provides information about minor changes being made to the Cambridge IGCSE Accounting syllabus for exams in 2014-2015. It summarizes the changes as replacing requirements to produce balance sheets with statements of financial position, and replacing appropriation accounts for limited companies with statements of changes in equity. It explains how these changes will be incorporated into existing teaching resources, and provides examples of the new required formats for a statement of financial position and a statement of changes in equity.

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    Bridging Document Igcse Accounting 1

    Uploaded by

    Khaled Turk
    200 views4 pages
    This document provides information about minor changes being made to the Cambridge IGCSE Accounting syllabus for exams in 2014-2015. It summarizes the changes as replacing requirements to produce balance sheets with statements of financial position, and replacing appropriation accounts for limited companies with statements of changes in equity. It explains how these changes will be incorporated into existing teaching resources, and provides examples of the new required formats for a statement of financial position and a statement of changes in equity.

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    Bridging Document Igcse Accounting 1

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    This document provides information about minor changes being made to the Cambridge IGCSE Accounting syllabus for exams in 2014-2015. It summarizes the changes as replacing requirements to produce balance sheets with statements of financial position, and replacing appropriation accounts for limited companies with statements of changes in equity. It explains how these changes will be incorporated into existing teaching resources, and provides examples of the new required formats for a statement of financial position and a statement of changes in equity.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    200 views4 pages

    Bridging Document Igcse Accounting 1

    Uploaded by

    Khaled Turk
    This document provides information about minor changes being made to the Cambridge IGCSE Accounting syllabus for exams in 2014-2015. It summarizes the changes as replacing requirements to produce balance sheets with statements of financial position, and replacing appropriation accounts for limited companies with statements of changes in equity. It explains how these changes will be incorporated into existing teaching resources, and provides examples of the new required formats for a statement of financial position and a statement of changes in equity.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    BRIDGING DOCUMENT IGCSE ACCOUNTING

    What changes are happening to Cambridge International IGCSE Accounting?


    Cambridge International Examinations made some very slight changes to the
    syllabus for 0452 IGCSE Accounting for examinations in 2014 and 2015.
    These changes are

    Replacing the requirement to produce balance sheets with a requirement to


    produce statements of financial position. This applies the following syllabus
    sections:
    4.3.2, 4.5.2, 4.6.1, 4.6.2, 4.6.3, 4.6.4, 4.6.5, 4.6.6

    Replacing the requirement to produce an appropriation account for a limited


    company with a requirement to produce a statement of changes in equity.
    This applies to syllabus section 4.6.3

    There are no changes to

    the ways in which the qualification can be taken

    the forms of assessment and construction of question s

    the weightings for each question paper

    What do these changes mean for the CIE IGCSE Accounting resource suite
    from Cambridge?
    The existing textbook and workbook can be used by teachers and learners until a
    new edition becomes available which will incorporate the above changes.
    Replacing balance sheets with statement of financial position
    Any reference to balance sheets in the existing textbook will be replaced with a
    reference to statements of financial position. The recommended format for a vertical
    statement of financial position is shown below.

    Sole Trader
    Statement of Financial Position at ...................
    $
    $

    Assets
    Non-current assets

    Cost

    Land and buildings


    Fixtures and fittings
    Office equipment
    Motor vehicles

    xxxx
    xxxx
    xxxx
    xxxx
    xxxx

    Current assets
    Inventory
    Trade receivables
    Less Provision for doubtful debts
    Other receivables
    Other receivables (accrued income)
    Bank
    Cash

    Depreciation
    to date
    xxxx
    xxxx
    xxxx
    xxxx

    Book
    value
    xxxx
    xxxx
    xxxx
    xxxx
    xxxx

    xxxx
    xxxx
    xxxx

    Total assets

    xxxx
    xxxx
    xxxx
    xxxx
    xxxx
    xxxx
    xxxx

    Capital and liabilities


    Capital
    Opening balance
    **Plus Profit for the year
    Less Drawings

    Non-current liabilities
    Loan
    Current liabilities
    Trade payables
    Other payables
    Prepaid income
    *Bank overdraft

    Total liabilities

    * If the business has only one bank account, only one of these will appear
    ** If there is a loss for the year, this will be deducted rather than added

    xxxx
    xxxx
    xxxx
    xxxx
    xxxx

    xxxx

    xxxx
    xxxx
    xxxx
    xxxx
    xxxx
    xxxx

    Replacing limited company appropriation accounts with statements of changes


    in equity
    The statement of changes in equity should summarise the changes during the year to
    the ordinary share capital, retained earnings, and general reserve.
    The treatment of preference share dividend depends on the type of preference
    shares. However the syllabus does not require learners to understand the different
    types of preference shares, so CIE are taking the approach that preference
    share dividend will be included in the income statement.
    Any ordinary share dividend which has actually been paid during the financial year
    is recorded in the statement of changes in equity for that particular year. Sometimes
    the directors will recommend an interim ordinary dividend (half way dividend) to be
    paid during the year. This will appear in the statement of changes in equity for that
    particular financial year. At the end of each financial year the directors of a
    company propose that ordinary share dividends are paid and these will be paid early
    in the following year. These proposed dividends will appear only as a note to the
    financial statements for that particular year: they will be included in the statement of
    changes in equity in the year in which they are actually paid.
    Example
    Anand Ltd was formed on 1 July 20-3. By 30 June 20-6, 200 000 5% preference
    shares of $1 each and 600 000 ordinary shares of $0.50 had been issued and were
    fully paid.
    The profit for the year ended 30 June 20-6 before the preference share dividend was
    $58 000. On that date retained earnings brought forward amounted to $41 000 and
    the general reserve amounted to $45 000.
    Half of the preference share dividend was paid on 31 December 20-5. On 30 June
    20-6 the remaining preference share dividend was outstanding.

    The proposed final ordinary share dividend of $30 000 for the year ended 30 June
    20-5 was paid on 30 September 20-5. On 1 January 20-6 an interim ordinary share
    dividend of
    $12 000 was paid.
    The directors proposed a final ordinary share dividend of 8% for the year ended 30
    June 20-6 and a transfer to general reserve of $8000.
    (a) Prepare a relevant extract from the income statement for the year ended 30 June
    20-6.
    (b) Prepare the statement of changes in equity for the year ended 30 June 20-6.
    (a)

    Anand Ltd
    Extract from Income Statement for the year ended 30- June 20-6
    $
    10 000

    Expenses Preference share dividend (5000 + 5000)

    (b)

    Anand Ltd
    Statement of Changes in Equity for the year ended 30 June 20-6

    Balance at 1 July 20-5


    Profit for the year
    Dividend paid (final)
    Dividend paid (interim)
    Transfer to general reserve
    Balance at 30 June 20-6

    Ordinary
    Share
    Capital
    $
    300 000

    300 000

    General
    Reserve

    Retained
    Earnings

    Total

    $
    45 000

    8 000

    $
    41 000
    48 000
    (30 000)
    (12 000)
    (8 000)

    $
    386 000
    48 000
    (30 000)
    (12 000)
    -

    53 000

    39 000

    392 000

    The proposed ordinary share dividend for the year ended 30 June 20-6
    does not appear in the statement as it has not yet been paid.

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