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CIMA Financial Pillar Financial Management

CIMA Financial Pillar Financial Management

CIMA Financial Pillar Financial Management : Syllabus overview

Paper F2 extends the scope of Paper F1 Financial Operations to more advanced topics in financial accounting (preparation of full consolidated financial statements and issues of principle in accounting standards dealing with more complex areas) and to developments in external reporting. With the advanced level of financial accounting and reporting achieved in this paper, the analysis and interpretation of accounts becomes more meaningful and this constitutes a substantial element.

CIMA Financial Pillar Financial Management

CIMA Financial Pillar Financial Management : Syllabus structure

The syllabus comprises the following topics and study weightings:

  •  Group Financial Statements – 35%
  • Issues in Recognition  and Measurement – 20%
  •  Analysis and Interpretation of Financial Accounts – 35%
  • Developments in External Reporting – 10%

CIMA Financial Pillar Financial Management : GROUP FINANCIAL STATEMENTS (35%)


prepare the full consolidated statements of a single company and the consolidated statements of financial position and comprehensive income for a group (in relatively complex circumstances).


(a) prepare a complete set of consolidated financial statements in a form suitable for publication for a group of companies;

(b) demonstrate the impact on group financial statements where: there is a minority interest; the interest in a subsidiary or associate is acquired or disposed of part way through an accounting period (to include the effective date of acquisition and dividends out of pre-acquisition profits); shareholdings, or control, are acquired in stages; intra-group trading and other transactions occur; the value of goodwill is impaired;

(c) apply the concept of a joint venture and how various types are accounted for.

Assessment strategy

There will be a written examination paper of three hours, plus 20 minutes of pre-examination question paper reading time. The examination paper will have the following sections:

Section A – 50 marks Five compulsory medium answer questions, each worth ten marks. Short scenarios may be given, to which some or all questions relate.

Section B – 50 marks One or two compulsory questions. Short scenarios may be given, to which questions relate.

Indicative syllabus content

• Relationships between investors and investees, meaning of control and circumstances in which a subsidiary is excluded from consolidation.

• The preparation of consolidated financial statements (including the group cash flow statement and statement of changes in equity) involving one or more subsidiaries, sub-subsidiaries and associates (IAS 1 (revised), IAS 27 (2011), IFRS 3, IFRS 10, IFRS 11 and IFRS 12

• The treatment in consolidated financial statements of minority interests, pre and post- acquisition reserves, goodwill (including its impairment), fair value adjustments, intra-group transactions and dividends, piece-meal and mid-year acquisitions, and disposals to include sub-subsidiaries and mixed groups.

• The accounting treatment of associates and joint ventures (IAS 28 and 31) using the equity method and proportional consolidation method.

CIMA Financial Pillar Financial Management :  ISSUES IN RECOGNITION AND MEASUREMENT (20%)


discuss accounting principles and their relevance to accounting issues of contemporary interest.


(a) discuss the problems of profit measurement and alternative approaches to asset valuations;

(b) discuss measures to reduce distortion in financial statements when price levels change;

(c) discuss the principle of substance over form applied to a range of transactions;

(d) discuss the possible treatments of financial instruments in the issuer’s accounts (i.e. liabilities versus equity, and the implications for finance costs);

(e) discuss circumstances in which amortised cost, fair value and hedge accounting are appropriate for financial instruments, the principles of these accounting methods and considerations in the determination of fair value;

(f) discuss the recognition and valuation issues concerned with pension schemes (including the treatment of actuarial deficits and surpluses) and share-based payments.



produce a ratio analysis from financial statements and supporting information.


a) interpret a full range of accounting ratios;

(b) discuss the limitations of accounting ratio analysis and analysis based on financial statements.

CIMA Financial Pillar Financial Management : DEVELOPMENTS IN EXTERNAL REPORTING (10%)


discuss contemporary developments in financial and non-financial reporting.


(a) discuss pressures for extending the scope and quality of external reports to include prospective and non-financial matters, and narrative reporting generally;

(b) explain how information concerning the interaction of a business with society and the natural environment can be communicated in the published accounts;

(c) discuss social and environmental issues which are likely to be most important to stakeholders in an organisation;

(d) explain the process of measuring, recording and disclosing the effect of exchanges between a business and society – human resource accounting;

(e) discuss major differences between IFRS and US GAAP, and the measures designed to contribute towards their convergence.

Indicative syllabus content

• Increasing stakeholder demands for information that goes beyond historical financial information and frameworks for such reporting, including, as an example of national requirements and guidelines, the UK’s Business Review and the Accounting Standard Board’s best practice standard, RS1, and the Global Reporting Initiative.

• Environmental and social accounting issues, differentiating between externalities and costs internalised through, for example, capitalisation of environmental expenditure, recognition of future environmental costs by means of provisions, taxation and the costs of emissions permit trading schemes.

• Non-financial measures of social and environmental impact.

• Human resource accounting.

• Major differences between IFRS and US GAAP, and progress towards convergence.

CIMA Financial Pillar Financial Management : 


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