The Institute of Chartered Accountants in England and Wales
ACCOUNTING
For exams in 2020
Study Manual
www.icaew.com
, Accounting
The Institute of Chartered Accountants in England and Wales
ISBN: 978-1-5097-2730-8
Previous ISBN: 978-1-5097-1992-1
First edition 2007
Thirteenth edition 2019
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system or transmitted in any form or by any means, graphic, electronic or mechanical
including photocopying, recording, scanning or otherwise, without the prior written
permission of the publisher.
The content of this publication is intended to prepare students for the ICAEW
examinations, and should not be used as professional advice.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Contains public sector information licensed under the Open Government Licence v3.0
Originally printed in the United Kingdom on paper obtained from traceable,
sustainable sources.
The publishers are grateful to the IASB for permission to reproduce extracts from the
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: Web: www.ifrs.org
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 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 the Licensor on request.
© ICAEW 2019
ii ICAEW 2020
, Welcome to ICAEW
I'd like to personally welcome you to ICAEW.
In a fast-changing and volatile world, the role of the accountancy profession has never been
more important.
As an ICAEW Chartered Accountant, you'll make decisions that will define the future of global
business.
Whether you are studying our Certificate in Finance, Accounting and Business (ICAEW CFAB) or
our world-leading chartered accountancy qualification, the ACA, you'll acquire world-leading
knowledge and skills – with technology and ethics at the heart of your learning. A focus on
capabilities such as judgement and scepticism will enable you to make the right decisions in
diverse and often complex environments.
You'll be equipped to flourish and to lead, to embrace technological change and to be
adaptable and agile in your work – all within a set of values fundamental to trust and
transparency and which set you apart from others.
As the future professional, you're a force for positive change, investing in your own future and
contributing to wider economic progress.
Joining over 180,000 ICAEW Chartered Accountants and students worldwide, you are now part
of a global community. This unique network of talented and diverse professionals work in the
public interest to build economies that are sustainable, accountable and fair.
You'll also join a community of 1.7 million chartered accountants and students as part of
Chartered Accountants Worldwide – a family of leading institutes, of which we are a founder
member.
ICAEW will support you through your studies and throughout your career: this is the start of a
lifetime relationship, and we'll be with you every step of the way to ensure you are ready to face
the challenges of the global economy. Visit page vii to review the key resources available as
you study.
With our training, guidance and support, you'll join our members in realising your career
ambitions, developing world-leading insights and maintaining a competitive edge.
We'll create a world of strong economies, together.
I wish you the best of luck with your studies.
Michael Izza
Chief Executive
ICAEW
ICAEW 2020 iii
, iv ICAEW 2020
ACCOUNTING
For exams in 2020
Study Manual
www.icaew.com
, Accounting
The Institute of Chartered Accountants in England and Wales
ISBN: 978-1-5097-2730-8
Previous ISBN: 978-1-5097-1992-1
First edition 2007
Thirteenth edition 2019
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system or transmitted in any form or by any means, graphic, electronic or mechanical
including photocopying, recording, scanning or otherwise, without the prior written
permission of the publisher.
The content of this publication is intended to prepare students for the ICAEW
examinations, and should not be used as professional advice.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Contains public sector information licensed under the Open Government Licence v3.0
Originally printed in the United Kingdom on paper obtained from traceable,
sustainable sources.
The publishers are grateful to the IASB for permission to reproduce extracts from the
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: Web: www.ifrs.org
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 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 the Licensor on request.
© ICAEW 2019
ii ICAEW 2020
, Welcome to ICAEW
I'd like to personally welcome you to ICAEW.
In a fast-changing and volatile world, the role of the accountancy profession has never been
more important.
As an ICAEW Chartered Accountant, you'll make decisions that will define the future of global
business.
Whether you are studying our Certificate in Finance, Accounting and Business (ICAEW CFAB) or
our world-leading chartered accountancy qualification, the ACA, you'll acquire world-leading
knowledge and skills – with technology and ethics at the heart of your learning. A focus on
capabilities such as judgement and scepticism will enable you to make the right decisions in
diverse and often complex environments.
You'll be equipped to flourish and to lead, to embrace technological change and to be
adaptable and agile in your work – all within a set of values fundamental to trust and
transparency and which set you apart from others.
As the future professional, you're a force for positive change, investing in your own future and
contributing to wider economic progress.
Joining over 180,000 ICAEW Chartered Accountants and students worldwide, you are now part
of a global community. This unique network of talented and diverse professionals work in the
public interest to build economies that are sustainable, accountable and fair.
You'll also join a community of 1.7 million chartered accountants and students as part of
Chartered Accountants Worldwide – a family of leading institutes, of which we are a founder
member.
ICAEW will support you through your studies and throughout your career: this is the start of a
lifetime relationship, and we'll be with you every step of the way to ensure you are ready to face
the challenges of the global economy. Visit page vii to review the key resources available as
you study.
With our training, guidance and support, you'll join our members in realising your career
ambitions, developing world-leading insights and maintaining a competitive edge.
We'll create a world of strong economies, together.
I wish you the best of luck with your studies.
Michael Izza
Chief Executive
ICAEW
ICAEW 2020 iii
, iv ICAEW 2020
