Financial Reporting LO2: Prepare company financial statements | IFA Direct

Learning Outcome 2 of Financial Reporting (R/650/9645), Level 5 Unit 1 of the ATHE Level 5 Extended Diploma in Accounting, taught by UK Versity for learners on the IFA Direct programme. LO2: Can prepare company financial statements. This learning outcome shows you how to prepare a full set of financial statements for a limited company, including period-end adjustments, tax, dividends and a share issue. You learn how to find and correct errors, and you evaluate international reporting differences and the importance of anti-money laundering policy. These skills decide whether accounts can be trusted. Assessment criteria covered: 2.1: Prepare a full set of financial statements, incorporating relevant adjustments, for a specific limited company 2.2: Explain the need to identify and correct omissions and errors prior to preparing company financial statements 2M1: Evaluate international differences in financial reporting 2D1: Assess the importance of government policies towards anti-money laundering and other international transactions Chapters 0:00 LO2 overview, aim and assessment criteria 0:37 Session roadmap 1:10 What private and public company accounts contain 2:08 Period-end adjustments and their journals 2:48 Depreciation: straight line against reducing balance 3:33 Worked case: Calder Valley Packaging Ltd, trial balance 4:08 Information at 30 June 2026 4:48 Step 1: inventory, depreciation and receivables 5:30 Step 2: accruals, cost of sales and profit 6:13 Statement of profit or loss for the year ended 30 June 2026 6:56 Statement of changes in equity for the year ended 30 June 2026 7:38 Statement of financial position at 30 June 2026 8:20 IFRS 18 replaces IAS 1 from 1 January 2027 8:58 Accounting concepts and standards applied 9:43 Six errors the trial balance does not reveal 10:47 Journals to correct the six errors 11:27 Clearing the suspense account 12:06 Statement of revised profit 12:46 Revised statement of financial position extracts 13:26 Why errors must be corrected before the statements 14:08 When reported profit is wrong 14:52 IFRS, US GAAP and UK GAAP: where they differ 15:43 From EU-adopted to UK-adopted IFRS 16:28 Money laundering: three stages 17:02 Government policy on money laundering and international 17:45 When AML controls fail 18:28 Key terms for this learning outcome 18:57 Activity: correct the books and spot the risk 19:29 Check your understanding 20:02 What Pass, Merit and Distinction look like 20:48 Summary: company financial statements 21:31 Plenary: further reading and resources 22:06 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 #FinancialReporting #AccountingStudents UK Versity disclaimer: This video is UK Versity teaching material for learners on the ATHE Level 5 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