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ACCA F9 lectures ACCA F9 notes
June 20, 2013 at 11:27 am
I’m a little bit confused about the material inflation cost. Assuming that material is purchased equally throughout the year, wouldn’t the materials purchased at the beginning of the year be cheaper than those purchased at the end of the year? If that were the case, why wouldn’t we calculate using an average inflation rate (eg. 5% for year one, 15% for year two etc). Sorry if I’m being stupid! Thanks for your help.
John Moffat says
June 20, 2013 at 2:27 pm
What you are saying is sensible in real life. However for the exam we always assume that the price goes up in ‘yearly jumps’. (It is a point you could make if a written part asked for the limitations of what you have done in the arithmetic.)
June 20, 2013 at 2:47 pm
Thanks for clarifying that for me.
One more thing. Even for exam purposes, would I presume that material is purchased in advance for the whole year (instead of at the end of each year)? Therefore, do I presume that in year 0, I buy a machine? But then I wait 12 months until the start of year 1, when I buy the material? Or instead should I assume that year 0 is the very start of year 1, and materials are not purchased until the end of the year?
Sorry if I’m making life difficult, I just can’t get it clear in my head at the moment!
June 20, 2013 at 2:56 pm
Time 0 is the start of the first year. Time 1 is the end of the first year / start of the second year. And so on…..
We always assume that operating flows (e.g. revenue, materials, labour etc.) occur at the ends of years (unless told otherwise).
So the first years purchases will result in a cash flow at time 1, the second years purchases result in a cash flow at time 2 and so on.
June 20, 2013 at 3:06 pm
Thanks, I understand now!
April 24, 2013 at 12:14 am
Based on my residual knowledge, I thought when the depreciation rate is 20% it means the asset life is 5years or 25% it means it is 4years. But to my greatest surprise when the depreciation rate was 25% (four years based on default knowledge) and the investment under appraisal has a useful life of 3years, the depreciation working stopped at 3years instead of 4years. Is it that the question is NOT possible to come like that in exam , in other words, just used like that or we are to consider JUST the investment under the appraisal’s useful life of 3years ONLY in this case i.e. the example given and ignore the default rule. Indeed, you are great! Thanks a lot.
April 25, 2013 at 9:44 pm
@rolake You are confusing depreciation with capital allowances. Depreciation is the accounting charge to the profit and loss over the economical useful life of an asset. Capital allowances are a reduction in tax payable on qualifying assets which reduces the amount of corporation tax owing.
In addition depreciation is a notional accounting cost and not a CASH flow it is therefore not a relevant cost and should be ignored.
June 20, 2013 at 11:22 am
Capital allowances use the reducing balance method of depreciation, not the straight line method that you described.
June 20, 2013 at 2:25 pm
Be careful – although capital allowances are usually reducing balance, there have been some questions where you have been told that they are calculated straight line. (I am only talking about Paper F9 obviously).
The question will always tell you the capital allowance ‘rules’.
April 21, 2013 at 9:23 am
Please opentuition I need an urgent t video lecture on F5 June,2009 Exam Q4 Bit & pieces & Dec 2009 Exam Q5 Stay Clear, Very important.
Thanks for your good jods…!!
April 21, 2013 at 9:29 am
Why is this posted in the F9 forum?
April 21, 2013 at 8:34 am
well delievered lecture. . thanks. .
April 6, 2013 at 7:39 pm
Brilliant explanation, so easy and straightforward. I wish my classes were the same!!! thank you so much
December 1, 2012 at 10:40 am
oh, what has happened? the lecture was running and suddenly stopped. now all F9 lectures show 0:00 minutes length and do not play =(
October 30, 2012 at 12:21 am
This was so simple and easy to understand.Thanks
October 14, 2012 at 3:38 pm
In my BPP book, we have the ‘fisher formula’, (1+i)=(1+r)(1+h),
why no mention of this in opentuition notes or lectures? Please help….is it the formula that is on page 52 of the notes?
September 8, 2012 at 12:19 pm
Excellent ! ! So simple ! keep it up
April 26, 2012 at 11:06 pm
Great explanations! I started watching all of lectures and the subject suddenly feels so straightforward. Why books can not be written in that way?! The taxation on investment seems now such a simple little calculation.
If I pass F9 it will be only thanks to those lectures.
June 22, 2012 at 1:29 pm
@annak, acca is tryin to make money out of it, they cant leave that straight forwad i believe!!
October 30, 2012 at 8:22 am
@annak, hey annak..where r u frm? u look so smart…which level of prof studies r u in at the moment..
April 13, 2012 at 8:17 pm
How do we show the workings on an answer shit. Do we need to show them the way u were doing?
April 26, 2012 at 11:09 pm
@lloyd, I think you meant sheet? Although the answer sheet can go the way you described if the exam will be really hard one
April 8, 2012 at 12:02 pm
well explained, keep up the good work, i am ready to attempt questions on this and am pretty sure i will tackle them with no difficulties at all. You are simply the best!!!
March 3, 2012 at 12:09 pm
Good subject delivery and perfect explaination of subject matter. I like it.
October 14, 2011 at 10:16 am
Really enjoy your lectures and its soo understandable. Thank you so much.
October 2, 2011 at 6:26 am
What the 25% represent?I do not figure out how to calculate the workings of capital flows?Thank you!
July 15, 2011 at 4:38 pm
if all lectures go like this, then, there would be no problems at all.
well organised and easily to understand.
May 24, 2011 at 4:44 pm
You explain more clearer thank you for that
May 12, 2011 at 5:10 pm
Nice Lecture. Very understandable
May 5, 2011 at 12:03 pm
thanks for all your help, your lectures made my home studying more enjoyable because you are very clear in your explanations.
April 13, 2011 at 9:04 pm
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