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Question 1 – got lost in the net asset calculation because of the deferred tax liability. added back the draft loss and removed the actual loss. Also got lost in the NCI calculation. didnt know what was expected of me as i never saw anything similar in my 6 months of studying SBR. Consideration calculation was ok but SBP calculation was tricky. Goodwill calculation was ok and cashflow part was not that bad.
Question 2 – part a – the computer components part was misleading. I added the components to the cost of the asset and depreciated. Then disposed at a loss at year end as per scenario. dont really know what was expected of me!
part b – Business combination – again was a bit tricky and not a clear cut between asset acquisition and business combination. I concluded as a business acquisition due to workforce and process acquired.
part c – not the usual ethics question. Mainly involved money laundering risks, intimidacy, self interest and conflict of interest.
Question 3 – part a – treated the the property as investment property and income shown in the SPL. any gain and losses of the property to be shown on SPL and no depn. At the year end when operating lease ends property to be changed to inventory
part b – got confused when reading the scenario as in my opinion was twisted and misleading but thinking of afterwards, it was a finance loan and lifetime expected credit losses had to be recognized.
part c – sale and lease back with a financing component. Unfortunately i did not account for the financing component since i was so rushed and pressured that it got out of my mind. hope i get some good marks for explaining the sale and lease back and the treatment.
question 4 part a – digital companies vs traditional manufacturing companies – i mentioned that new digital companies tend to have less tangible non current assets than traditional ones since they focus on intangible assets which they often cannot capitalise and show in the SFP. Mentioned the difficulties in measuring and valuing and difficulty to comapre for some rations such as gearing. Also mentioned that integrated reporting may be one tool which helps investors understand these entities.
part b – I capitalised the big movie and expensed the small one, but apparently there were some research expenses in the first movie that had to be expensed. (again i overlooked such expenses as was rushed)
part c – revenue question. i treated the 2 distinct performance obligations as revenue to be recognized over time. Allocated the 10m upfront fee to the seperate POs and recognized revenue for 1 year only with the rest as contract liability to be recognized once the PO is satisfied.
part d – lease – not the usual lease question since the scenario was twisted and the lease liability was increasing every year. explained how to recognize a lease (ROU, depn, Lease Liability and finance cost) and tried to discount the lease to the present value but had no spreadsheet and numbers were all over the place.
Overall in my opinion the exam was not fair when compared to previous exams. Question 1b was way too much and the scenario is so twisted that had to read it too many times and still to this day i dont really know what was expected of me. The other questions were also really tricky. 3.15 hrs is not enough for that type of paper. Im just hoping they are lenient with the marking….
