*** ACCA P2 March 2017 Exam was.. Instant Poll and comments ***

I thought exam was ok, was pretty proud of myself with Q1a, was only out by about $6k and I know this is because I forgot to adjust reserves for forex and the transfer from CI to NCI. The rest of the questions who knows but I didn’t feel under too much time pressure, finished a minute or two before time up. It was a nice exam, just hope I’ve passed it now.

It was a fair exam. I just dont think i was good enough to beat it today!

Q1
a consolidated SOFP (2 subs incl. foreign, disposal of investment from 60 to 54%)
b investment property valuation policy (from HC to FV and effect on foreign translation)
c IAS 21 + use of AVG exchange rates

Q2
a investment property
b Intangible assets
c impairment of CGU

Q3
a operating lease
b debt instrument valuation (FV)
c revenue recognition + provisions

Hi Ooi, I did Q4. For the first part. Fair presentation, I just discussed about the fundamental and enhancing characteristics of Financial statements and how they aid in the decision of users like investors. Then discussed a bit about how errors and ommissions affect decisions. Forgot to talk about damage to reputation.
4a2. Outline how exposure draft differs in recognition criteria. I mentioned the definitions for assets, liabilities, equity, income and expenses stated in conceptual framework. I chose to discuss about the current issue on Leases which address Liabilities. Mentioned Exposure Draft is now redefining all leases as that which transfers risks and rewards. Operating Lease to be included. Type A and Type B lease
4a3. Discuss benefits of Integrated Framework
I mentioned about non-financial being provided. Narrative of the contents.
4b. Purchase agreement 1. Record cost as there has been transfer of asset. Mentioned IAS16. Contingent Asset recorded.
Purchase agreement 2. Contingent Asset not recorded as its not probable that the supplier will not pay compensation. Breach of contract. I might have made a mistake here but I said that hire purchase of the machinery and additional costs incurred recognised as per IAS16. Mentioned Provision should be recognised for the possible obligation to pay supplier if contract terms fulfiled.

Thank you for letting me know what came up guys seems i missed out on an exam id of been able to attempt quite well 🙁

P2 March 2017 Questions
Q1. Statement of Financial Position for year ended 31st December 2016
Sub 1. Acquired 60% holding on 1/1/16
For $30million
Share capital:$30million
Retained Earnings at Acquistion date:$23million
Fair value of NCI:$18million
Goodwill not impaired
Disposed 6% holding on 31st Dec 2016
Paid$5million cash
NCI increased to 46%

Sub 2. Foreign sub with functional currency Dra
Acquired 1/1/16
Had trade losses at year end Dra 30.8 million
Property at Carrying Value Dra 12million
Fair value Dra 22 million
50% for rental
50% owner occupied
15% impairment loss recognised
No OCE in either

Also had Share Appreciation Rights
5000 options
100 managers
4 year scheme
Scheme Start date 1.1.15

FV at year end 31.12.15
Fv at year end 31.12.16 -$10

Foreign Exchange rates
$:Dra
1.1.16 – 2
31.12.16-2.8

1a.Uk Group acquired. Directors are not sure how to account for Sub. Not understand much about FRS101 and FRS102.
Directors decide not to show Directors Remuneration using the True and Fair Override in the Companies Act 2006.
Discuss

1c. Foreign Exchange Effects on Translating using the average rate at year end. Discuss how average method calculated, ethical issues and effects of using average rate

Q3.a. Carsoon Co-retailer of motor vehicles
Lease vehicles to customers for 3 years
Contract terms: Penalty if Drive more than 10,000miles. Vehicle cannot be used in other jurisdictions. Maintenance responsibility remains with Carsoon
Vehicle should be unmodified during lease term
Vehicle can be bought at above market value at the end of lease term
Or returned to Carsoon who will subsequently sell it at its retail outlets.
Discuss how to account lease from inception to the sale 8marks

Q3b. Debt instrument $6m. Interest -4% Effective rate of interest-4%
6 years term
Credit losses equal to $400000
Fair value as per Level 1 -$5.3m
Company forecast using own fair valuation method-$5.5m
Sold instrument after year end for $5.3m
Discuss how the debt instrument should be recorded at the end of year with reference to relevant standards?

Q3c. Carsoon enters into a contract to construct retail outlet on customers land. Contract terms state penalty payable to customer if delays in construction likewise Carsoon penalises customer if they cannot gain access.
Project was delayed and also there was restricted access. Additional costs incurred. Carsoon wants to offset penalty payable against the penalty receivable. Additional costs including Administrative expenses incurred.
Developed a storage facility. Capitalised expenses as asset.
Discuss how to account for the above?

Q4. A1.Discuss how users percieve Financial Statements are fairly represented?
A2. Outline how recognition criteria in Conceptual Framework is differentiated in Exposure Draft?
A3. Discuss the benefits of Integrated Reporting

4B. A co enters into a purchase contract to buy machinery for $4m and $6m. Delays in delivery is penalised and supplier should compensate $500k
Contract 1. Machine Delivery delayed. Compensation received
Contract 2. Machinery not received. No compensation received. Instead ACo had to hire machinery to meet production targets..
Discuss how to account for this using relevant standards.

I used 5% discount factor, there were cash flows of some kind of which I needed to find present value of year 2 and 3 can’t remember why, but I do remember using it

I don’t even bothered to think why that discount factor was given.

No, I was really perplexed by it!

@sonyam11 said:
Anyone??

I think this was referring to the fact that it still had control and should still be consolidated – don’t think it is great wording but that is how they have written it in the past papers I looked at.

I think that was the UK version paper judging by the question above. That definitely wasn’t on the international paper.

Did the question 1A about Shared based payment really stipulate Share appreciations rights because as far as i know ,the question only quoted share options so its only recognised as equity settled and no cash settled?