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Be ready for the big day.
It may be tempting to relax and forget about teaching until the end of summer. But the new term will run much more smoothly – for you, and your students – if you start preparing now.
Q2022 is going to include exciting developments. You will teach students both accounting knowledge and key professional skills to make them into rounded finance professionals.
They’ll learn how to use data analytics to predict, rather than react; and you’ll help them acquire business skills so they can make a dynamic contribution in the workplace.
Get an overview now by looking at the key differences.
Financial accounting has been reviewed across all levels and at Level 2 the focus now includes the importance of understanding that digital bookkeeping systems are automating manual bookkeeping systems but both methods are always following the same principles of double entry bookkeeping.
This has been developed to equip students with the knowledge and understanding of manual and digital bookkeeping required to be able to record entries from the set-up of a bookkeeping system through to trial balance.
Reference to digital systems includes apps as well as both desktop and cloud-based accounting software.
The integrated content has not changed significantly from the current content but has been written to enable more relevant and varied assessment, that will better equip learners for both the workplace and the financial accounting unit at Level 3.
Management accounting has been reviewed across all levels and small but significant changes have been made to improve this overall topic.
The key changes are:
The changes mostly focus on the introduction of budgeting and have been developed so that students are introduced to a fixed budget and associated variances at Level 2 and then a flexed budget with more complicated variance analysis at Level 3.
Learning Outcome 4 has been introduced to allow students to familiarise themselves with formatting and mathematical formulae used to support cost calculations. These skills will not be assessed through use of spreadsheet software.
This unit includes content from the AQ2016 Working Effectively in Finance, Business Communications and Personal Skills, Developing Lifelong Learning Skills and Working Effectively in Finance. It focuses on both the internal and external business environment, introduces professional ethics and introduces topics that will be further developed in the Level 3 Business Awareness unit.
To review the complete unit specification, please refer to the Level 2 qualification specifications on this page.
The development of this unit was driven by the extensive research carried out with training providers and employers in 2019.
Most of the AQ2016 Ethics for Accountants content, including pared down coverage of money laundering, has been included. Additional references to ethics and professional scepticism have been included within topic areas where relevant in all other units within the Level 3 Diploma.
The law content currently in AQ2016 Final Accounts Preparation relating to preparation of financial statements for different entities, including the content and effect of partnership agreement, has been included alongside an understanding of the types, structure and financing of businesses and the roles and needs of their stakeholders.
Learners will understand how businesses are affected by their internal and external environments, including PESTLE analysis and some understanding of micro-economics. The impact of technology on the accounting processes/records has also been covered, including considerations for data protection, information security and cyber security.
Learners will gain an understanding on how to communicate information to stakeholders, including the information an organisation needs and how big data, data analytics and visualisation of information all support communication.
This unit combines learning outcomes from AQ2016 Advanced Bookkeeping and AQ2016 Final Accounts Preparation. The unit content has remained largely unchanged, with the use of accounting software outputs referenced where relevant.
The funding of investments in non-current assets has moved to Management Accounting Techniques and the units of production method of depreciation has been removed. The comparison of the financial recording and reporting requirements of different types of organisations, and partnership agreements has moved to Business Awareness. Changes in partnerships has been removed.
Different methods of valuation of inventory (ie FIFO and AVCO) has been removed to avoid duplication of content with Management Accounting Techniques.
An additional learning outcome on calculating and interpreting basic profitability ratios (data analysis) has been introduced, which better supports the existing content on use of mark-up and margin when preparing information from incomplete records.
The accounting principles of business entity, materiality, consistency, prudence, and money measurement have been added to strengthen awareness of the framework of accounting underlying the preparation of final accounts. The differences between entries in the extended trial balance (ETB) for sole traders and partnerships has be added. However, the completion of an ETB is limited to sole traders only.
This unit is a direct replacement of AQ2016 Management Accounting: Costing. It no longer includes the last-in-first-out method, process costing (though accounting for wastage remains), just-in-time, long-term investment appraisal or limiting factor decision making. Use of the output from accounting software is referenced throughout the unit where relevant. The high-low calculation for semi-variable costs has also been included.
Standard costing and budgeting have been made more explicit and will build on the fixed budgets introduced at Level 2 to include flexing for volume and an understanding of rolling budgets. Variances will include changes in revenue as well as costs and will include a basic operating statement and what to do about adverse variances.
There is a new learning outcome on principles of cash management which includes the preparation of a basic cash budget and the calculation and interpretation of liquidity and use of resources ratios (data analysis). This supports topic areas on financing investments transferred from AQ2016 Advanced Bookkeeping.
Spreadsheet skills have been included in the assessment of this unit eg preparing and flexing a budget and calculating variances.
This unit is a direct replacement of AQ2016 Indirect Tax. Coverage of VAT remains largely unchanged except that Making Tax Digital (MTD) is specifically referenced. Topic areas also cover special schemes that affect small businesses. The emphasis on the completion of VAT returns have been replaced by reviewing and verifying information contained within VAT returns and calculations.
A new, knowledge-based learning outcome on payroll has been introduced. Use of the output from accounting software is also referenced throughout the unit where relevant.
To review the complete unit specification, please refer to the Level 3 qualification specifications on this page.
The two previous management accounting units Management Accounting: Budgeting and Management Accounting: Decision and Control have been merged into one unit and assessment. The new title is Applied Management Accounting.
This new unit provides learners with a focus on the three fundamental areas of management accounting: planning, control, and decision making.
Drafting and Interpreting Financial Statements unit content has had duplication removed and apart from this there is little change to the unit content of the corresponding Financial Statements of Limited Companies unit in AQ2016.
Accounting Systems and Controls has been renamed to Internal Accounting Systems and Controls. The new unit has a specific emphasis on communications, ethics, sustainability and the impact of technology on the accounting industry along with risk management.
For the new Business Tax unit, IR35 and Research and Development have been removed and duplication with Personal Tax has been addressed as appropriate.
The new Personal Tax unit remains largely unchanged, but learners will only be required to gain an understanding of inheritance tax (IHT); the requirement for IHT calculations has been removed.
External Auditing has been renamed to Audit and Assurance and consists of internal and external auditing to reflect the likely accounting roles that professional level learners are involved in. Additional content will include corporate governance and the role of the audit committee.
Cash and Treasury management has been renamed to Cash and Financial Management and has less focus on treasury management. There is a focus on managing finance and liquidity within the unit.
Credit and Debt Management unit content is largely unchanged from the Credit Management unit in AQ2016 although there is development of concepts introduced in the Level 2 and 3 specifications.
To review the complete unit specification, please refer to the Level 4 qualification specification on this page.
The Key Differences will help you get your bearings, but you need to read the full specifications.
Open the panel below to access the full specifications for each level.
Qualification technical information documents
Here’s where you can find the technical information requirements for each unit of the qualification.
With the theory out of the way, it’s time to get practical. We have some great resources to get you going.
Make sure your students are registered for the right qualification.
If you’re still enrolling students onto AQ2016 qualifications, remind them they need to register with AAT by 31 August 2022. Anyone who
doesn’t register by this date will have to transfer to the Q2022 equivalent qualification.
Read more about AQ2022 here.