Accounting Principles and Procedures — RICS APC Revision Guide
Accounting principles and procedures is a mandatory competency for most RICS APC pathways, requiring candidates to demonstrate working knowledge of how financial information is recorded, reported, and interpreted within a surveying or property context. At its core, the competency covers double-entry bookkeeping, the accruals and matching principles, balance sheet structure, profit and loss accounts, and the basics of cash flow. Assessors expect you to understand these principles well enough to apply them to the kind of fee-earning, cost-management, or client-account scenarios that arise in practice. This guide maps what you need at each level.
19 articles in this competency · Browse with filters on the main library
What are accounting principles and procedures?
Accounting principles and procedures are the standardised rules and day-to-day processes surveyors use to record, measure and report financial transactions. For the RICS APC, the principles include the accruals, going-concern, prudence and consistency concepts, while the procedures cover double-entry bookkeeping, bank reconciliation, management accounts and the preparation of statutory financial statements under UK GAAP (FRS 102) or IFRS.
What the RICS APC expects you to know
- Core principles: accruals, going concern, prudence, consistency, materiality and substance over form.
- Key procedures: double-entry bookkeeping, trial balance, month-end reconciliations, management accounts.
- Financial statements: profit & loss account, balance sheet, cash-flow statement and directors' report.
- Reporting frameworks: UK GAAP (FRS 102 and FRS 105) for most UK companies; IFRS for listed entities.
- Practice application: reading client financial statements to assess covenant strength and financial health.
What the RICS APC expects at each level
L1 Knowledge
Level 1 requires knowledge and understanding of the fundamental accounting principles: accruals, going concern, consistency, and prudence. You should know the structure of a balance sheet and profit and loss account, understand what double-entry bookkeeping achieves, and be able to distinguish between capital and revenue expenditure. Familiarity with how VAT, depreciation, and bad-debt provisions appear in accounts is expected. Assessors may ask you to define any of these concepts clearly and accurately.
L2 Application
Level 2 is about applying accounting knowledge to your day-to-day work. In diary entries this might mean: reconciling a client account for a property management instruction, calculating accrued income on a valuation completed but not yet invoiced, or checking whether a contractor's interim application is consistent with cost-to-completion projections. You should be able to read a set of management accounts and identify what the figures are telling you about a project or business unit.
L3 Reasoned advice
At Level 3, assessors expect reasoned advice. They may ask you to interpret a set of accounts that shows a client business under financial stress and advise on implications for a lease renewal or asset valuation. You should be able to explain why the accruals principle matters for income recognition, challenge an unusual accounting treatment, and articulate what professional obligations arise when you suspect a client's financial information is materially misleading.
Level 1 — Knowledge & Understanding articles
Foundational articles on Accounting Principles & Procedures. These cover the principles, definitions and documents assessors expect a Level 1 candidate to know.
Accounting Principles
While not directly prescribing accounting principles, the RICS does emphasise the importance of understanding and applying fundamental...
Accounting Techniques for Managing a RICS Surveying Business
Effective accounting practices are essential for the success of any business, and RICS surveying businesses have some specific needs to...
Balance Sheet
A balance sheet is like a snapshot of a company's financial health at a specific point in time. It's like a photograph that captures what...
Budgeting techniques
Effective budgeting is essential for the success of any business, as it helps allocate resources efficiently, track project...
Cash Flow Statement
A cash flow statement is like a detailed log of a company's cash incomings and outgoings over a specific period. It shows you where the...
Costing of Resources
Costing resources effectively is crucial for any business manager to optimise resource allocation, control expenses, and ensure...
Effective Financial Management
Effective financial management is crucial for the success of any RICS surveying business. Here are some key strategies to help you manage...
Example: Constructing a Budget for a Surveying Business
Constructing a Budget for a Surveying Business
Financial Statements
Accounting principles are the ground rules used to prepare financial statements that are consistent, reliable, and comparable. They...
Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS)
Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) are the two most widely used sets...
How is Property Treated in an Entity's Accounts?
Here's a breakdown of how property/assets are treated in an entity's accounts: Recognition: Definition of an asset: To be recognised, a...
Monitoring and Managing Financial Resources Within Your Business
Monitoring and Managing Financial Resources Within Your Business
Profit and Loss Statement
A profit and loss statement (P&L) is like a report card for a company's performance over a specific period, usually a quarter or a year....
Setting Financial Objectives for a Surveying Business: Examples
As a business manager in the surveying industry, setting clear and measurable financial objectives is crucial for achieving sustainable...
Simple Example of a UK Property Company Balance Sheet
Assets: Fixed assets: £500,000 (Residential property owned by the company) Current assets: Cash: £100,000 Accounts receivable (money owed...
Simple Example of a UK Property Company Cash Flow Statement
Imagine a small UK property company named "Brick & Mortar Estates" that owns apartments for rent. Here's a simplified cash flow statement...
Simple Example of a UK Property Company Profit and Loss Statement
Imagine "Brick & Mortar Ltd." owns a block of flats in London. This is a simplified P&L for one year: Revenue: Rent receivable from...
Understanding Auditing: A Critical Component of Financial Reporting
Auditing is a fundamental process that ensures the accuracy and reliability of financial statements. An audit involves a thorough...
Understanding Company Taxation for RICS Surveyors: Corporation Tax, VAT and CIS
Tax is one of the most common stumbling blocks in RICS APC final assessment interviews. Although surveyors are not tax advisers, you are expected to…
Frequently asked questions
What accounting principles do RICS APC assessors most commonly test?
Assessors most frequently probe the accruals principle, the prudence principle, and the distinction between capital and revenue expenditure. Be prepared to explain each in plain language and illustrate with a practical example — for instance, that fee income is recognised when the service is delivered, not when the client pays. Going concern and consistency are also fair game at Level 1 questioning.
Do I need to understand double-entry bookkeeping for the APC?
You need a working understanding, not accountant-level proficiency. Assessors want to see that you know every transaction has two equal and opposite entries, and that this underpins the accuracy of financial records. Being able to explain how a fee receivable is recorded and then cleared on payment is sufficient for most pathways. You are not expected to prepare a full set of accounts unaided.
What is the difference between the accruals and cash accounting methods?
Under accruals accounting, income and expenditure are recorded in the period they are earned or incurred, regardless of when cash changes hands. Under cash accounting, transactions are only recorded when money is received or paid. Accruals accounting gives a more accurate picture of a business's financial position and is the standard required under UK GAAP and IFRS. Most surveying practice accounts are prepared on an accruals basis.
How does this competency link to client money handling in practice?
Client money held in a surveyor's practice must be kept in a designated client account, separate from office accounts. This is a regulatory requirement under RICS rules and connects directly to your understanding of balance sheet segregation and reconciliation procedures. At Level 2 you should be able to describe the reconciliation process. At Level 3 you should be able to identify the professional risk if client money is misapplied or unreconciled.
A client asks you to defer recognising a significant service charge reconciliation deficit to next year's accounts to avoid a difficult conversation with leaseholders. How do you respond, and what principles are engaged?
You would decline to defer recognition if the deficit relates to the current accounting period — the accruals and prudence principles both require it to be recognised now. Misrepresenting the reconciliation position could mislead leaseholders, breach your duty of honesty under the RICS Rules of Conduct 2022, and potentially constitute a financial misstatement. You should explain the position clearly to the client, document your advice, and if pressure continues, consider whether you can continue to act on the instruction.
Related competencies
These competencies share themes and often come up together in APC interviews.
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