Tutor tips for using the IFRS Red Book
Student conundrum: How should I use the IFRS Red Book I was given as part of my FR materials?
Students are given the IFRS Red Book (Parts A and B) and the supplementary material. Faced by these weighty volumes, they often ask: “How should I use these books? They seem very detailed and I don’t know where to start?”
Here’s what they need to know about the IFRS Red Book.
Well, firstly, try to see it as a positive that you will have this really useful resource to hand in the exam, but it will only be useful if you are familiar with it and know when to open it.
With that in mind, the sooner you start referring to it the better. So, when you are looking over the day’s FR materials and there is a reference to an IFRS/IAS or a bit of the Companies Act (extracts of which are in your supplementary materials), have a look at the text and decide whether you need to highlight or tab the books.
You should be cautious about having too much content highlighted or tabbed as it then will just add to confusion – be selective. Opening a page to a sea of neon highlighter is not going to be helpful.
Probably you want to concentrate on the Part B book – it gives the illustrative statements (IAS 1 for statements of profit or loss and other comprehensive income, financial position and statement of changes in equity and IAS 7 Statement of cash flows), illustrative examples (IE) like EPS (IAS 33) and share-based payments (IFRS 2). These IEs can be particularly useful in prompting you as to how to lay out the workings for certain calculations but there are far more than you will cover in class – you need to know which ones are relevant and examinable at FR.
Other bits that are useful include the decision tree in IAS 37 for provisions, contingent assets and liabilities (as well as the examples that follow immediately after) and the glossary. The glossary is at the back of both Part A and Part B and can be just the prompt you need to get started, particularly with a narrative question – it also points you to the correct IFRS/IAS. Have a look.
In Part A, the actual standards will help if asked to explain the disclosure requirements – but remember if asked to prepare a disclosure note, the standards don’t tend to have illustrative examples.
What you want to avoid is copying out text from the available texts – this will not gain many, if any, marks. You need to tailor the requirements of the IFRS or Companies Act to the particular question – this demonstrates you have understood and can apply the IFRS to a particular scenario.
So, our advice is to start using the books as soon as possible especially when you are practicing narrative questions.