Financial Accounting 2 LO1: Ownership and financial reporting statements | IFA Direct

Learning Outcome 1 of Financial Accounting 2 (T/650/9637), Level 4 Unit 2 of the ATHE Level 4 Extended Diploma in Accounting, taught by UK Versity for learners on the IFA Direct programme. LO1: Understand the relationship between organisational ownership and the nature of financial reporting statements. This learning outcome shows how who owns a business changes the way its accounts look. You compare sole traders, partnerships, LLPs, companies, manufacturers and not for profit bodies, see why owners pick one form, and learn how each form's statements, notes and audit differ. Assessment criteria covered: 1.1: Compare the capital structures of different organisations 1.2: Explain how and why a particular capital structure is selected 1.3: Analyse the effect the capital structure of an organisation has on the preparation of the financial reporting statements 1D1: Assess how a change of capital structure within an organisation will impact on the preparation of the financial reporting statements Chapters 0:00 LO1 overview, aim and assessment criteria 0:31 Session roadmap 0:59 What is a capital structure? 1:59 Sole traders 2:44 Partnerships 3:32 Sole trader: the capital account 4:22 Partnership: sharing the profit 5:14 Limited Liability Partnerships (LLPs) 6:01 Limited companies 6:42 Company: issuing shares at a premium 7:34 Choosing between equity and debt 8:17 Why a particular structure is selected 8:43 Manufacturing companies 9:24 Not for profit organisations 10:03 Comparing the capital structures 10:50 A capital structure in court: Salomon 11:36 Choosing a structure for a growing practice 12:21 Income statements and statements of financial position 13:22 How the statements differ by organisation 14:08 Manufacturing account 14:55 Income and expenditure account 15:45 Accounting policies and notes 16:26 The auditor's report 17:05 Changing the capital structure: what moves in the statements 17:52 Assessing a £100,000 funding decision 18:48 A sole trader becomes a company 19:35 Key terms 19:51 Activity: match the structure 20:15 Check your understanding 20:40 What Pass, Merit and Distinction look like 21:18 Summary 22:06 Plenary: further reading and resources 22:40 Plenary Watch the full IFA Direct playlist on the UK Versity channel:    / @ukversity   Study accounting online with UK Versity: https://www.ukversity.co.uk Course enquiries: admin@ukversity.co.uk #IFADirect #ATHE #Accounting #UKVersity #FinancialAccounting2 #AccountingStudents UK Versity disclaimer: This video is UK Versity teaching material for learners on the ATHE Level 4 Extended Diploma in Accounting, studied with UK Versity on the IFA Direct programme. UK Versity is an ATHE approved centre; the video is produced by UK Versity and is not issued or endorsed by ATHE or the Institute of Financial Accountants. It is for study only and is not legal, tax, financial or professional advice. Organisation names are used for educational comment only. Figures and rules are correct at the time of recording; always check current guidance and your assignment brief. © UK Versity Online Limited. All rights reserved. COPYRIGHT NOTICE: All content in this video is the exclusive intellectual property of UK Versity Online. This video, in whole or in part, may not be copied, reproduced, distributed, uploaded to any third-party platform, embedded, or integrated into any website, application, or learning management system without the prior written permission of UK Versity Online and the payment of applicable royalties. Unauthorised use, reproduction, or distribution of this content constitutes an infringement of UK Versity's intellectual property rights and will be subject to legal action under applicable UK and international copyright law. For licensing or permissions enquiries, contact: info@ukversity.co.uk