ADVANCED FINANCIAL ACCOUNTING Financial Instruments

This text has been written for candidates sitting the advanced financial reporting papers of the
Association of Chartered Certified Accountants (ACCA — Strategic Business Reporting), the
Uniform CPA Examination (FAR and BAR disciplines), the Chartered Institute of Management
Accountants (CIMA F2/F3), the Institute of Cost and Management Accountants of Bangladesh
(ICMAB — Advanced Financial Accounting) and the Institute of Chartered Accountants of
Bangladesh (ICAB — Application and Advanced levels). Financial instruments is, without
exception, the single most heavily examined and most poorly answered topic across all five
bodies. The reason is rarely conceptual ignorance; it is the inability to convert a narrative
scenario into a schedule of numbers and then into journal entries within the time available.
Accordingly every chapter follows the same disciplined four-part structure:
1. Principle — the standard-setter's requirement stated precisely, with paragraph references.
2. Mechanics — the arithmetic, expressed as formulae and as amortisation or roll-forward
tables.
3. Worked illustration — a full numerical solution with journals, computed to the currency
unit.
4. Examination practice — past-paper-style requirements with model answers written in the
style and length that earns marks.