Icaew Cfab Btf 2019 Study Guide

The Institute of Chartered Accountants in England and Wales

BUSINESS, TECHNOLOGY AND FINANCE

For exams in 2019

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The publishers are grateful to the IASB for permission to reproduce extracts from t he International Financial Reporting Standards including all International Accounting Standards, SIC and IFRIC Interpretations (the Standards). The Standards together with their accompanying documents are issued by: The International Accounting Standards Board (IASB) 30 Cannon Street, London, EC4M 6XH, United Kingdom. Email: [email protected] Web: www.ifrs.org Disclaimer: The Disclaimer: The IASB, the International Financial Reporting Standards (IFRS) Foundation, the authors and the publishers do not accept responsibility for any loss caused by acting or refraining from acting in reliance on the material in this publication, whether such loss is caused by negligence or otherwise to the maximum extent permitted by law. Copyright © IFRS Foundation All rights reserved. Reproduction and use rights are strictly limited. No part of this publication may be translated, reprinted or reproduced or utilised in any form either in whole or in part or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying and recording, or in any information storage and retrieval system, without prior permission in writing from the IFRS Foundation. Contact the IFRS Foundation for further details. The IFRS Foundation logo, the IASB logo, the IFRS for SMEs logo, the 'Hexagon Device', 'IFRS Foundation', 'eIFRS', 'IAS', 'IASB', 'IFRS for SMEs', 'IASs', 'IFRS', 'IFRSs', 'International Accounting Standards' and 'International Financial Reporting Standards', 'IFRIC' 'SIC' and 'IFRS Taxonomy' are Trade Marks of Marks of the IFRS Foundation. Further details of the Trade Marks including details of countries where the Trade Marks are registered or applied for are available from th e Licensor on request.















Contents 1

Key resources

1

2

Study guide

2

3

Syllabus and learning outcomes

18

4

Technical knowledge grid

22

5

Glossary of terms

31

The Business, Technology and Finance module will provide you with an understanding of how businesses operate and how finance functions help businesses to achieve their objectives.





























1 Key resources Whether you're studying the ACA qualification or ICAEW CFAB, with an employer, at university, independently (self-studying), or via an apprenticeship, we provide a wide range of resources and services to help you in your studies. They can be found f ound on our website. Be sure to visit the specific area for your qualification. ACA students, you can access dedicated exam resources, guidance and information for the ACA qualification via your dashboard at icaew.com/dashboard. ICAEW CFAB students, you can find everything you need at icaew.com/cfabstudents. Syllabus and technical knowledge grids This gives you the full ful l breakdown of learning outcomes for each module and how your y our technical knowledge will grow throughout the qualification. Study guide This guides you through your learning process, putting each chapter and topic of the Study Manual into context and showing what learning outcomes are attached to them. Exam webinars The pre-recorded webinars focus on how to approach each exam, plus exam and study tips. Errata sheets These are available on our website if we are made aware of a mistake within a Study Manual or Question Bank once it has been published. Student support team Our dedicated student support team is here to help and advise you throughout your studies, don't hesitate to get in touch. Email [email protected] [email protected] m or call +44 (0)1908 248 250 to speak to an adviser.















2 Study guide 2.1

Help yourself study for your ACA exams The right approach 1

2

Develop the right attitude Believe in yourself

Yes, there is a lot to learn. But thousands have succeeded before and you can too.

Remember why you're doing it

You are studying for a good reason: to advance your career.

Focus on the exam Read through the Syllabus in this guide

3

This tells you what you are expected to know.

The right method See the whole picture

Keeping in mind how all the detail you need to know fits into the whole picture will help you understand it better.

The Practical significance and Working context to each chapter in the study guide put the material into context.

The Learning outcomes and Section overviews in overviews in the study manual show you what you need to grasp. grasp.





Use your own words

To absorb the information (and to practise your written communication skills), you need to put it into your own words. words.   



Give yourself cues to jog your memory

Answer the questions in questions in each chapter. Draw mindmaps. mindmaps. Try 'teaching' a subject to subject to a colleague or friend. f riend.

The Study Manual uses bold to bold to highlight key points. points.

 

4

Take notes. notes.

Try colour coding with coding with a highlighter pen. Write key points on points on cards.

The right recap Review, review, review

Regularly reviewing a topic in summary form can fix it in your memory. memory. The Study Manual helps you review in many ways.

Each Chapter Summary will Summary will help you to recall that study session.

The Self-test actively Self-test actively tests your grasp of the



















2.2

Study cycle The best way to approach the Study Manual is to tackle the chapters in order. We will look in detail at how to approach each chapter below but as a general guide, taking into account your individual learning style, you could follow this sequence for each chapter. Key study steps Step 1 Topic list Step 2 Introduction

Activity This topic list is shown in the contents for each chapter and helps you navigate each part of the book; each numbered topic is a numbered section in the chapter. The practical significance and working context sections for each chapter, set out in this study guide give you the big picture in terms of the context of the chapter. The Examination context guidance shows what the examiners are looking for and tells you why the topics covered in the chapter need to be studied.

Step 3 Section overviews

Section overviews give you a quick summary of the content of each of the main chapter sections. They can also be used at the end of each chapter to help you review each chapter quickly.

Step 4 Explanations

Proceed methodically through each chapter, particularly focusing on areas highlighted as significant in the chapter introduction or study guide.

Step 5 Note taking

Take brief notes, if you wish. Don't copy out too much. Remember that being able to record something yourself is a sign of being able to understand it. Your notes can be in whatever f ormat you find most helpful; lists, diagrams, mindmaps.

Step 6 Examples

Work through the examples very carefully as they illustrate key knowledge and techniques.

Step 7 Answers

Check yours against the suggested solutions, and make sure you understand any discrepancies.

Step 8 Chapter summary Step 9 Self-test Step 10 Learning outcomes

Review it carefully, to make sure you have grasped the significance of all the important points in the chapter. Use the Self-test to check how much you have remembered of the topics covered. Ensure you have ticked off the Learning outcomes.

















e e t u a D d

m a x e d n a s e c n e r e f e r s u b a l l y S

s i d h n s n t , a e o l r i s s s t s i a y i o t t a l f n i r n l t s a a s o s e i e p o c i t u r n a i n e t e a e i r t e p t q r c a c i s t e r t a a e d s l r n i e e n o l h u i a e s h n o r t e r c q e b r i a i t u p e e . b a s e r g f , l g i y e r b , d i r a o l e h h t i g s r r 5 t t n c o o a l e e t o w f f s : n t d o d , d i c s m w y r o u b e l n s n l u r s e o b d a e o a a 1 a n v i n a , n s l k i y a s n r d i f y i t k s i t l l r o o t o e a t e i c i f l e r e t t t s e i t l i e i c o n i e i i b v y s 1 i a n j r r e d n s l i n b i u t i o t c : o f i b . a h e c s m i f s a o t s f p r y o d s c e . l e e h e i i e n n l a j e l a t n c s o d d n e n k e o l a o i a p h a s n b e r e t i i t t i i t e i t p h r t e s a e s s e o p t a n h u t h u e h f s e e i i n m s g l t i i n n s e e l e s e p a a h s e s T b S T s r T o h r c s u a x u u t W e b e Q m s s E • • • • T h c

h c a o r p p A

e f e k h o t a d . e n r e d M c . n u a n s y o w a a , t s t d r r g r y a e u e k r t c e t o r e p a T S a b p t d R a i e b t h n i m n s h r e o A t e u c i c M f h e h e h e S o t m t h n u t t t s e 1 i d r t a o n d u i o n h y e n t b h s a b a t s p i y a c n s a r a o r r l o o h i h t t e a a l e . e i w i C l d l m w y f n l i s h k o f o c r c s i p a e h r c g i e t s s i s e ' u u e d k r o q g e a a t y e r u i v e l d h t i t t e h s o t a l t t c n y f c n a e d u w r r o e n o a t r e e j a a a b h e n e i s u h R M k L l s t o c

t x e t n o c g n i k

n i r f y o l o s l e l l i t s n i u s i r t o e i d w h o d r u n t e u l u w d n o r u a . a e t s e y e a a t o a i y a n s n n h f p f e i n i o s , h e n t m u d s i a a , f s o t m i t t l g s s n e d o e n e t n t a r l r i t i e t o e s a e n o e r u e t f o m o r y e m e s h t r b r a s e p n m s t u i p a n e u s n r g n v o i o a n a o o a e a i y r r d

t x e t n o c

s n d o e i t p s s e a u r q g t e s v . e t a r - h e f t l e u p s a o y h e t c h t a e h h t h g e t n u r i o u s r s t h n t n e i k o r t o o p y n w l l i y u a l l f e m a r e n a h i F c t

9 1 0 2 W E A C I

















































e e t u a D d

7


l s s a e n n d i o i e n t n s e a u . o p c h y d r n n a t t s b m i o u s e a e s f n i e x t i n e s s e e o g h e g i d a e t s r d c e c d t d b o n i e n n o e a , e e y r g n a a l r i t b t s s h l h s n e a t p w l i s t s e i t e o s i a n s s o a t e g , k : n a y r s e i s n v r y m n l l n t e e h i i i c e a l r K l s a s c e e r l r s n s o n c o p e f e t e k o t . s a u o w e r n y f a e l i i n p l e x a c s b l h a l u t t p t e e r p , e e c r a r n n e s p a e i t e i o l v a n i n t i t b e t r r i v o n c a f o a i o n y a h e i f e s f o a p s t s i l i r p L ' ' s m s c g e c s r g e E r e s n r l o e p n e c d a a n . e e o o l s i a p t t T t e i o g n t o l t i a e i a t r r i u l r S r m a t t e r p t r o o e a c n s a r s l o t E o d s i t n s i e C t e n e n u e l s S P P C P e t r d s e f a u o u a f u i l o u a s Q m d p c Q m c s q p m E • • • • • •

h c a o r p p A

t t i a t g d e f t h s n 2 o i i s e g u e n l d h r u l o n s n g e o y o a a u h r l t n h h d w p i 1 o t t w r n o r c o s h o y l l i a e p l f n l t o g l s h o y e a f e a i u t c h t i t l t n i b y c l a c t e u d r n a d i e f l c e l o h s s s e s u t y r h s s w h a e t , e e s e 9 h g c h s u . u i t e t o m f h h s o d t y d o t a r y t o t e e e e s a 4 t o r e h t r t r n w s a d g n h o y u r s n n e c r . u n p s e i i i h h e o i k e l o u y d t t y t h s k c c i , a l a o w c p a u e , a k f r e c F e 4 m e r s . e 3 h o f r o r s y i c w o h e t a b n w s t g t o e e . p c i t t t h u c r t e h y r s x a d o e t c r r o e a a c e h e r f t a e e o N e h e s C n v S l t p h

t x e t n o c g n i k

y g r e . n t i a s o l l i t s r n i r t d y t o w a s i u n t e u l u w ' s o r a y e a a r o y e s e s n n f p f i i o s , h e p u d s i t s t n o e i d o n s s t s l e n i t i e o f e s u i u e t o m l l r e t b r a o b a s a u i p u s n r g n h s o o a e a i c e

t x e t n o c

s e t n g h i t n f o i p k o t r d n o n t a e r w y e o b h t p r m e t i a t t p s s a n o h o m c i t e s e h e h t t u r h . q e i s m t e s v n i o f h e c t t o h f l r s e t g e t s p n u o e a r r h h a h e T c l t

:

e e r v i a t i s t e e c g p n n e i m r o p c e f p c e r s a i x r i i m s r s e t i s u y r n a x l e i b s r a y a d e m l t g s n l e s l . a a a l o ' s i ' n y g f r e s g m T h f e t e t o a i , c f G O k s A f r a , a i r n C W t o t F e B S S P s A S c e , p b • • • • • • S 1

e d i u G y d u t S























































e e t u a D d


n . s e l s o n . i p o : n l r o i y n i e n t c o n a t t o t m i r n r o n t c a t n o t i i e t f u n x e i g t i o a n c n s c e u e s e f o e d d s e f e n e l c c n e a l u c n l a c e y , d e h b f n n a i c t a n l r r e w a e n n o t e e r m c t o : c i n r a i t a o k e n i n f n s n r m n f y r K l e e o a i i a l a f f r e r n d e o l e f n h r o t . s i a f i e e f p e k s . t l i e x a i p n s h l p g a u f f c t t p e , e c t e i n i n h o g i e i n s b e n a r a t n r r l , o n e i h s e l c o y a h o a p o f r s r i p y s l s i o c s , u u l s r l s n c t n a e s s b a n s b o a c l e c o e i o i i k , a a c i a o u t i r i s u t t l o f r e t p a i t c n r i s s l a t d s l i s t e T S M E p c 3 e e t n e r s e ; e u u u u u a s p g o c Q c Q m s q p E • • • • S 1

h c a o r p p

s t u ' s o s b e a n s i s t e u s b t e i h t w o t h a h d w n r a e r v o f o c i s u n o o y i 7 t c r n e f u . t s p e k a c s h n a C a t n s

t x e t n o c

r o o f s e 2 l y e c l l d u h n t a a n f f c a r n i e o f i p 1 a e t y e r c s s u h n 3 t t t i o n i c i y t p b d c i o l n t e n a s c l , e s r k e a h s s e a e g y v t r n u d o o u n e i s r t d u h t s a n e u b y n v l s a e k h a k n . c h s i i t e a n r , u t u t q x o d i o t u e y e t c d t i a n t r c n u r e o a a

s F e d s l S l l n e o n r o a t e r e C r . u t e o k r n s d h n y e u e n h a / t l h b h t e a e g o t t c a m e c u l y i a M t l . n t o a n n ) a , n l c e m r e a a t a y i i . s e i o c n v n g l l h t e i i a c s t a a n i a 4 e n i v m c t a n l i o i o n c b d a i t n t a r e p f n s s n t a i t c i r e a t s ( l e n i o a e i u t p m m n h f n e e a d t e o u , r a p e y f i t R c e u g c . u h a t o r g e f i n e i l q s q r w u u l s c n i i o i c a t a / n p s e / d o a b s d h s o a e v s t w i r t e y e a n a t l n i y n t m e m t t n i e r f a i t e t t b a o i f a m a t r s a i t i v s h n l m o o i t e . a t i t r e a e t s t f r s t s t r l e e d s r c e n c i e u o a d n s f e p e a / e t e n h m e t n a l n a p u y d i a n m g t p y a t d q l i u , m n e b d o s y a o n t , i r s t e l r 5 r s i h y a h I o l r n i a b u c t l l a e u o n s s t P f c a t y e r u c a y l t e y o e r K s f l t e i i o e i d e r t c a h n f e e a v a f p t d r p r c o o o e f u e n r u n f a a c e r n f

9 1 0 2 W E A C I

























































e e t u a D d

t x e t n o c m a x e d n a s e c n e r e f e r s u b a l l y S

3 1

t s o e g m . l d s a a e n n l y o n a l i . i d l c o i w t n w m t i i n n o y n a n a e a n l i t s e f d x k e o e e n k n e r i i d u l u s a h r b t s u t o g r o c f c e u o s a o c u : a o l r r o o y t a s e m t y r h l s p i e t r n e o , r e l a e f t a i e e r k p s h t i x h l e e s c t f t h t a c e n n o n t e n i n f p r i r i o n o o e i o o o p a h i o t p p r s s n a s c c s u r s n i o l e l a l y n e a t o u c f e i o t o i l i i u t r u n t t o a r i p q c n t r i s l a s t a t n e i e S p l e u t e r s r g e u u c e p a u e s y p E • Q r c Q m s t

n o i s t e a : l r e u n u s e r o d r g i e t e u a r a c d s t l o e e i c r d u c n g p u e y r o e a r r p r e a d s e i y f e n r n c l a r a i v p y n s i l u i c r c e b s i n s i p a a l d c l l t a s y n i i u c d s n W o a c E i C c f i n A C . R c i R c F A F C I F c e , p b • • • • • S 4

h t s n u s e t o l g i d e y n f v e i y a u o e u n h i t s c t e a t h o a c c r g r n s l h y u w o t o a n h a l y a i k c r i a t t s h t e s a d o n c g h y i d e s n i n i i t h c u y u n n w d f r i a h s y i a o a q i d i u , l e r e r e u e ' c w k i e t n n h t r s w s h e c 4 a h t , d , h o e e W s g e w t n f t a e m

o . s t m e n r h e a t h t e h f l g s u o t o n r d i n o h e p t

e d i u G y d u t S









































e e t u a D d


5 1

e t t i r a r d e a o l u c . o i u r e a n m p c a e i c r l : a a t a e n o n p r n n r i r x a e t n y a e t c C r a e r n p r e s v e s e K t e s o u e a g n . U n o v e i c g y e n d o s o e d n i e b d y e l e l h n o n e G t i t l t r p o a w e i a a f n f e C l r t e e r a k i : c t i o m o l i o e l y r a s d p e n a a l e i r o n p p e o k o r a r r n h p l r e o f C r s s s k x p l i o p s e p u p e d e i e h a t t c a l c r d r g e n i c a x b r n e c o i n t r o u r a o C n a e l o i n a o a o o a w f l r y s p e l n s h n h s i o s n l K p r t s y t n s p n t n c a U e S , e a e o c f n t o o . i l i e i v e l f o i r i i m i t t e d i t a o h p x i t e t , o o n o e s c s i h n e T C C M G T R c e t t s i e e l e f e n , s e u u o u e s u r p c Q a Q m c q d E • • • • • S 5 e h e u s t h a f t o 1 l y n - i t o n t a i s o b t o a i e l t e d l u i h s d a p a t c i t e e e s h h r c e d c c : i n d o h a u 2 r

n r e a , h e t l e d d n l n o o i u C t o 5 i p d g h i n d u n s h i a a g u s

. t s r e e t t - p f l a e h

e d i u G y d u t S









































e e t u a D d


7 1

r u o s g e n i a o r l t n i y n i p ' r n e n s r t a i o i e i e c e r e e n , l t t r e s e n f e u t o d m : a n n i c l s p r e s y p r u i s e n o d c u u u e n i i u a b a t o t n d g n b a r c a n a l s i d e e o o a e o r n n i t n l r t i g n o e f d y i t i t t i a o f e u t , e c c l o i y d d a t n e , g l t y e u g n t k s e n l e n l e t a e r n e e s l r n g p o o k n a i v a i n i o r i s e u e i w l r t e r d : r m g m e a s e o o f m a a m t p e , e l l o t r e s e , r y r r n p o r c i r t n d e n . a i n e i g u k y e a t c s s l f o n s c p t s i o n t i l s s s u t a u i n f t e h e t e u t o n u n i s b a e b d a c g k b i s n o n g i e n i o c s o a u i a e i n o n r l o o o s o s d s i f t d l n m m t i t s m s o l h o a e u l o p n t t n h r r a r e e e r y e c t s p l b d o l a t s a n w n u , u e l a u k k e n c t l p i y d o l e i o . q x i o s t h e s g v r i r d s i i q e f . a s a n i p e t l t i o n w t i e e r s m m c e t t s a e W I n n l R R G m I m a d F u e a a u n e e s e , o u x x p d o u r s Y q e E m c q a E • • • • • • • S 6 s f s a t d n o o u t n i e e a c t o s e i k y d c y f e y r r t l f s e c a e e w e s p e n v e m r r l i f a y c o t 1 u f e d e s a n t n s t a a u i t r x n u h n g i u t t c e e p t o i o t h c s i n a g c i e n c t i k n u

e f s o e h t f d n n f n i o a o o g , d ) h n n 3 e c i i o i c y 5 g f i t n n a a a o e a i c l o g e u i t y p t n

s l n a l i o u w i l t o u u s y f e e o e r u v y a q i n c g i t o s e y e s t a . t s - e e p

e d i u G y d u t S























3 Syllabus and learning outcomes Covered in chapter

1

Business objectives and functions Students will be able to identify the general objectives of businesses and the functions and tasks that businesses perform in order to meet their objectives. In the assessment, students may be required to: (a) state the general objectives of businesses;

1





















3

Covered in chapter

The role of finance Students will be able to identify the purpose pur pose of financial information produced by businesses, specify how finance functions support business operations and identify sources and methods of finances for businesses. In the assessment, students may be required to: (a) specify the extent to which financial information: 

provides for accountability of management to shareholders and other





















Covered in chapter

4

The role of the accountancy profession Students will be able to specify the role of the accountancy profession and why the work of the profession is important. In the assessment, students may be required to: (a) identify the importance to the public interest of high quality, accurate financial reporting and assurance; (b) specify the rationale for key parts of the profession's profession's work and the links

9





















6

Covered in chapter

External environment Students will be able to specify the impact on a business of the environment in which it operates including the potential effects of sustainability issues. In the assessment, students may be required to: (a) specify the signalling, rewarding rewarding and and allocating allocating effects of the price mechanism on business (including the concept of price elasticity); (b) specify the potential types of failure of the market mechanism mechanism and their

13





















4 Technical knowledge grid 4.1

Technical knowledge The tables contained in this section show the technical knowledge in the disciplines of financial reporting, audit and assurance, business analysis, ethics and taxation covered in the ACA syllabus by module. For each individual standard the level of knowledge required in the relevant Certificate and Professional Level module and at the Advanced Level is shown. The knowledge levels are defined as follows:























Business Analysis





















Certificate and Professional Levels












































































































































































































































































































Icaew Cfab Btf 2019 Study Guide

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