How to Clear CA – Final Paper 1: Financial Reporting

Since it’s that time of the year again, that dreaded time that every CA student knows about, I thought I would share this post, tell you what I learnt through my journey and maybe help you find a way through the awful month of May / November.
A little heads up before we begin – I became a Chartered Accountant after clearing the May 2016 exams so I’m still fairly new and I know the most up-to-date system, so you don’t need to worry.  Also, I opted to self-study for this subject, which I think helped me a lot in being able to write this article.
So, without further ado, let’s get into the plan, shall we?

 

How to clear your FINANCIAL REPORTING paper:

 

Let’s divide this into three parts so that it’s clear and I can cover everything without confusing you. The first part is the REFERENCE MATERIAL, the second part is the TIME MANAGEMENT and the third part is the PAPER PRESENTATION. I believe that it is with the combined implementation of these three which helps a student write the exam successfully.

 

REFERENCE MATERIAL:

 

Logically, it makes sense to me that since the suggested answers / answer key is coming from the institute, naturally so should the material you study from. This is what I tell everyone who ever asks me for advice about clearing not only this subject, but any subject. Please note that I am not going to depend the basis of my plan on whether you went for coaching or not. Regardless of that, here are my suggestions:
  • MP Vijay Kumar
  • Practice Manual (Theory & Sums)
  • Study Material (Only Sums)
  • Compiler (From ICAI)
  • The most recent two RTPs
  • Last four Mock Papers (Conducted by ICAI)

It is pretty straight-forward. All you have to do is study from these books. Now that you know what to refer to, let me briefly tell you how to sort it all out. This is the order in which I recommend you study.

1) MP Vijay Kumar: Do not be terrified by its size. I know it’s scary but it doesn’t really take all that time to complete. For the large chapters like Amalgamation, Consolidation and Valuation you can solve one or two sums under each concept (The sums are sub-divided by concept) and that would give you an understanding of what you can expect from each chapter. Again, if you have the time, by all means, please do solve each and every sum from the book. It is highly beneficial.

2) Practice Manual: This book is very useful for two major areas of the paper – Theory and Standards. The more you get a grip over these two, the better it will be for your attempt. The PM gives a good overall view about your Q1 and Q7 of the exam paper. Also, make sure to solve every sum from every chapter without taking a peep at the answers midway.

3) Study Material: Skip the theoretical portion and solve the sums from the Study Material in every chapter. Ideally this will not take very long if you make sure to breeze through after you are thorough with the entire portion.

4) Compiler:  I highly recommend this because it is better than any scanner you get in the market. If you are able to solve even 70% of the sums in the compiler, then you are in a very good position for the examination. Do buy this and use it during the last month to practice these sums and get an idea of how the examination will be.

5) Revision Test Papers: I would suggest getting at least two RTPs and using these as exams to test how good you are at the subject. Naturally you will be solving this a week or two before the exams. But make sure that you put in equal effort in correcting your own answers and learning from your mistakes because otherwise this is a pointless exercise.

6) Mocks: I used to solve many mock papers when I studied. I never went to the institute to write them but downloaded them from the website, printed them out to get a real exam feeling, set the clock to three hours and write the papers as though they were my final exam. I suggest you to do the same. Before correcting your own paper, give a half an hour gap between writing and correction. Also, be stingy with marks. As stingy as possible. This will help you prepare for the worst.

TIME MANAGEMENT

It is easy to understand what you are supposed to study from but very difficult to plan how to cover everything in 3 months. I’m going to help you do just that. But please note that this period doesn’t involve coaching for this subject but rather should be the plan after the initial coaching period. I’m only guiding the self study portion.

Let us have an aim of studying for a minimum of 10 hours per day. Even if you do wake up between 5 – 6 AM and start, ten hours is easily achievable and a definite must if you want to cover all four subjects. Of course, FR is not your only subject and I understand that. But it definitely requires more time than the other three papers simply because there are three chapters which are format based and extremely time consuming. So, I am going to try and split it up for you into two parts. Major and Minor.

The ‘Major’ part covers Amalgamation, Consolidation, Valuation and Standards. The ‘Minor’ part covers the rest of the chapters – Esops, EVA, VAS, Theory, etc.

My strategy was to skip one chapter from the ‘Major’ part – between Amalgamation and Consolidation. For me, the obvious choice was Consolidation. If you wish to follow this method, then make sure to be thorough with the other chapters because otherwise this would be a terrible plan.

If you wish to study them all, that’s pretty alright as well. Try to do this ‘Major’ part at the time of the day where you are the fastest. For me it’s early morning. Find your peak time and try to finish at least one sum in each concept of every chapter. For the ‘Minor’ part of the portion, make sure to solve one chapter a day. It ideally shouldn’t take more than 2 – 3 hours per chapter but you go at your own comfortable pace. Don’t leave a chapter midway. That will not ensure efficiency. Start a chapter only when you know you have the time to complete it.

Your target is to complete solving the Practice Manual and Study Material in 1 – 1.5 months. This is achievable even while studying for other subjects. But if you prefer to study only one subject at a time, and you want to allot 10 hours per day only for FR, then give yourself a target of 15 – 20 days only.

As for the compiler, your target should be one full day per chapter for the ‘Major’ part and one full day for two chapters for the ‘Minor’ part. If you have started amalgamation and you feel like one day is not enough, but one day is too much for Valuation, then adjust between the two but otherwise, just do the most that you can in a single day and move on to the next chapter. Understand that if you get stuck and want to continue solving the same chapter for two or three days, you will not have the time to complete everything and will be putting yourself at risk. The compiler shouldn’t take you more than 6 – 8 days to complete.

RTPs (2) and Mocks (2) – Together this will take a total of 3 – 4 days. Ideally it is a last minute check on your performance to evaluate how ready you are and what chapters you will need to quickly brush up on. Again, correcting your paper is a must. I can’t reiterate enough how vital this is.

PRESENTATION

Now comes the most important part. This is one that most students neglect or don’t really take all that seriously.  A lot of you believe that as long as the answers are correct and that your effort goes into the preparation, how your answer looks on the final paper doesn’t really matter. Here are some dos and don’ts you need to follow to be able to successfully complete your paper.

1) FR is format based. This means you need to draw lines, boxes, tables and all that. Make sure to use a scale and pencil. This is mandatory. Please do not think that it is going to ‘waste’ your time. It’s essential.

2) Support your answers with working notes. Show your workings and supporting information below each answer. Give reasons and show calculations elaborately.

3) Theory is very scoring. Try to answer any theoretical question with clarity and in bullet points.

4) For any solution that doesn’t involve a balance sheet, try to highlight the final figure either by making it bold, drawing a box around it or just underlining it so that the person who is correcting the paper is drawn to your conclusion. But only do this when you are sure of your answer.

5) Any time you have a formula based question, write the general formula first and only then substitute it with figures.

And finally, it is absolutely alright if you haven’t been able to clear in the first shot. I mentored a lot of students so far and one beautiful thing I’ve noticed is how they are able to put in more focus and effort by following these steps. Most of you only require a sense of direction and that is what I wanted to help provide. You know what hard work means, you know what Chartered Accountancy is about. All you are unsure of is how to approach it.

Change isn’t something that comes instantly. It’s a gradual process. But once you reach the top, there is no looking back. Give it time, be patient and just give the exams your best shot. I am not going to say ‘All the Best’. Instead, I am going to say, just do your best.

So, that’s all I have for you today.

Coming up next is my tips for STRATEGIC FINANCIAL MANAGEMENT.
I hope you have a wonderful day.

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