WHAT ELEMENTS OF UK LEGISLATION AND UK GAAP DIFFERENCES ARE POTENTIALLY EXAMINABLE？

　　A full schedule of differences can found in the UK examinable documents. However，the following may provide a useful guide of some of the examinable areas.

　　Regulation

　　The Paper F7 （UK）syllabus requires a certain amount of knowledge of the regulation relating to UK legislation. Of particular relevance is the requirement to produce financial statements （for single entity and groups）and the circumstances where a parent may be exempted from producing group accounts.

　　For Paper P2 （UK），in addition to the above requirements for Paper F7（UK），basic knowledge of legislation surrounding schemes of arrangement and reconstruction has been included. Note that reconstructions are also examinable in the international paper，but without the specific legal requirements.

　　Accounting standards

　　Group accounts

　　Paper F7 （UK）candidates need to know how the computation of consolidated goodwill （including negative goodwill）

　　and the requirements for its amortisation recognition differ to IFRS rules. This also impacts on the calculation/valuation of noncontrolling interests/minority interests.

　　Other group accounting differences are in the recognition of separable intangibles only，treatment of acquisitions costs，and changes in the value of contingent consideration.

　　The Paper P2 syllabus develops the concept of group accounting and therefore additional differences result in the accounting for disposals and joint ventures. Candidates will need to have a good working knowledge of these differences.

　　Non-current assets

　　Differences in the rules covering the frequency of revaluations of tangible non-current assets and different valuation methods dependent on the nature of the asset are examinable in Paper F7 （UK）。

　　There are also examinable differences in the treatment of the gains or losses on non.current assets including those relating to a clear consumption of benefits.

　　The UK GAAP rules allow a choice of recognising or expensing certain development costs. Whereas Paper F7（UK） requires candidates to explain these differences in principle，Paper P2 （UK） may incorporate numerical calculations.

　　Taxation

　　The use of timing differences （rather than temporary differences）in UK GAAP and that discounting of the deferred tax liability is permitted under UK GAAP are examinable in Paper F7 （UK）.Deferred tax on a revaluation of non-monetary assets（normally a property）is only accounted for where a binding agreement has been entered into to sell the property. Paper P2（UK）may incorporate calculations whereas Paper F7 （UK） will only require discussion in principle of the issues.

　　Other differences examinable in Paper F7（UK）include：

　　·statement of cash flows：main UK GAAP differences are in the format of the statement and in the definitions of cash and liquid resources

　　·construction contracts：main UK GAAP difference is simply the presentation of the contract balances in the statement of financial position

　　·borrowing costs：main UK GAAP difference is the choice over capitalisation during the construction of non.current assets

　　·discontinued operations：differences relate to the recognition criteria and the presentation and analysis in the income statement of a discontinuing operation

　　·the use and treatment of 'exceptional'items under UK GAAP.

　　UK GAAP has the use of a '90% rebuttable presumption' to determine the classification of a leased asset.

　　It is important for candidates to be fuly versed in examinable international GAAP as this is the main focus of the UK papers . Candidates are expected to have a reasonable working knowledge of the key diferences and areas of examinable legislation as they are demed relevant for those continuing to use UK GAAP or wanting to obtain the audit qualification .

　　The Paper P2 syllabus develops （with the exception of construction contracts - this is not examinable at Paper P2）many topics covered at Paper F7，but also introduces some new areas. Of these developed topics and new areas，the following is an outline of some of the key Paper P2 （UK）examinable differences not previously covered in this article.

　　Leasing developed to cover differences in treatment of land and buildings，sale and leaseback，and operating leases.

　　Employee benefits in that UK GAAP only addresses retirement benefits and does not allow the 10% corridor.

　　Related party differences with reference to the materiality being considered under UK GAAP，disclosure and exemption from disclosures.

　　Segmental reporting approach，accounting and key disclosure differences.

　　IFRS for SMEs is a recent addition to the syllabus. The key areas to focus on will be：

　　i definition of an SME

　　ii key principles and rationale for IFRS

　　iii topics omitted from IFRS for SMEs

　　iv types of simplifications

　　v accounting treatments disallowed under IFRS for SMEs

　　vi specific recognition and measurement simplifications vii summary of the IFRS for SMEs focusing on differences with full IFRS.

　　Candidates will only need to be aware of the UK differences in principle for the above.

　　Full details of examinable differences are given in the examinable documents，which should be read in conjunction with the Study Guide.

　　HOW SHOULD CANDIDATES PREPARE FOR THE UK PAPER？

　　It is important for candidates to be fully versed in examinable international GAAP as this is the main focus of the UK papers. Candidates are expected to have a reasonable working knowledge of the key differences and areas of examinable legislation as they are deemed relevant for those continuing to use UK GAAP or wanting to obtain the audit qualification. If intending to become a registered auditor in the UK-hence obtain the audit qualification in order to do this -any student taking Papers P2 and P7 from June 2011 onwards must take the new UK version. As such it would be beneficial that candidates commencing study attempt Paper F3 （INT）rather than Paper F3 （UK）（from December 2011，Paper F3 （UK） will not be offered）and then move on to Paper F7 （UK）and Paper P2 （UK） as these will be in the new form outlined above. For those who have already completed Paper F3 （UK）and plan to attempt F7：

　　·at the December 2010 session should consider attempting Paper F7（INT）as this is marginally a better underpinning paper for P2 （UK）from June 2011 onwards

　　·after December 2010 should continue with the Paper F7 （UK）as it will be in the new form outlined above.

　　Those who have completed Paper F3 （UK）

　　and Paper F7 （UK）and plan to sit Paper P2 （UK）：

　　·at December 2010 are not impacted by the amendments outlined above

　　·after December 2010 should not be too concerned as the differences in UK and international GAAP are not so technically different at F7 and hence not insurmountable.

　　Note that this article is based on UK GAAP and international GAAP as at September 2010.

　　ACCA2010年12月考试时间：12月6日-15日

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