RICS APC – Accounting Principles and Procedures

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Accounting Principles and Procedures is a mandatory competency that APC candidates from all pathways need to achieve at Level 1.

Candidates from some pathways (Art & Antiques, Commercial Property Practice, Property Finance and Investment, Rural Surveying, Valuation) may elect to take this competency to Level 2 or 3 as part of their optional selection.

Accounting Principles and Procedures is a Core Competency at Level 3 for the Taxation Allowance pathway.

Please note that the requirements at Level 1 when taken as a Technical Competency within the aforementioned pathways are different from the requirements as a Mandatory Competency. You should refer to your specific Pathway Guide for more details.

The examples provided in this post are more focused on the Construction pathways but you should be able to relate our tips and advices to other Property and Land pathways.

What is it about?!

The official RICS definition is:

Level 1 = ‘Demonstrate knowledge and understanding of accounting concepts and the format and preparation of management and company accounts, including profit and loss statements, cash flow statements and balance sheets.’

This gives you the first clues to your study list;

  • Company Accounts & the Companies Act 2006
  • Management accounts vs. Financial accounts
  • Profit and loss statement vs. Balance sheet
  • Cash flow statements

Less obvious topics depending on your experience and CPD records may include;

  • Taxation
  • Capital allowances
  • Ratio analysis
  • Profitability / Insolvency
  • Auditing

All candidates may potentially set up their own practice or join their company’s management team in the future, therefore a basic knowledge of Accounting Principles is required;

  • For monitoring your own business accounts.
  • For assessing your competition.

Candidates may use Accounting Principles for different purposes depending on their pathway and experience;

  • For assessing the financial strength of contractors (for example in PQQ’s in a tender process or to assess initial signs of insolvency).
  • For assessing the financial strength of potential landlords and tenants.
  • For profits-method valuation

Potential APC Questions

Due to time constraints during the interview you are unlikely to be asked more than one or two questions on Accounting Principles but which questions is anyone’s guess!

Some very classic textbook questions would be to describe or compare and contrast some of the accounting documents;

  • What is the difference between a profit and loss statement and a balance sheet?
  • What do companies need to provide every year in accordance with the Companies Act 2006?
  • What is the purpose of a cash flow statement?

Some points that you may have stated in your Summary of Experience, your Case Study or previous answers may trigger some questions more specific to your experience.

For example, as a Quantity Surveyor, you may state in your Summary of Experience that you have reviewed the contractors’ financial information as part of a PQQ. Or that you have carried out a credit check before recommending the appointment of a contractor in your tender report. This may lead the APC assessors to ask you questions such as;

  • How do you carry out a credit check / analyse company accounts?
  • What type of financial information do you usually request in a PQQ?

Which may lead to;

  • What type of ratios can you use? (liquidity ratios, profitability ratios, gearing ratios)
  • What are the signs of insolvency in a credit check / company accounts?

Which could in turn lead to;

  • What measures would you recommend if your client insists on appointing a contractor with low credit rating? [This would be asked within the Procurement and Tendering competency]

Or you may state that you are aware of your company’s accounts which were presented to you at a staff meeting. The panel would then expect you to know the answer to this question;

  •  What is your company’s current turnover and profit?

Final Tips

Remember that you are expected to achieve this competency at level 1. While you should be aware of the main accounting ratios, you are not a qualified accountant and you should not claim that you are analysing companies accounts for your client. (Do not fall short of the RICS Rules of Conduct!)

Remember that for most candidates, you only need to attain level 1 so keep it simple.

All our past APC candidates will give you the same advice: do not underestimate the time required to revise (learn?) for your APC! It will easily take you 3 months of solid studying every evening.

To make this task a little easier, APC Support Ltd offer on-demand revision webinars covering all the technical and mandatory competencies in Quantity Surveying, Built Infrastructure, Building Surveying, Building Control, Project Management and Facilities Management.

Alternatively, we offer face-to-face training for corporate clients across the UK. Please e-mail us at Sonia@APCsupport-ltd.co.uk to discuss your requirements.

All the modules are recorded and will provide you with over 30 hours of formal CPD. You can attend them on a pay-as-you-go basis or subscribe to our unlimited revision package.

Best of luck!


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