[chris165]

In my opinion, employees wouldn’t really care too much. Experience is much more valuable.

The advantage of aiming for a higher average is that you are less likely to fail exams.

For example if you are prepared to a standard where you would score 70 on average, then even on a very bad day you would likely score 55-60. However if you were prepared to score 55, you could easily have a bad day and fail.

[chris165]

Same

[chris165]

Felt I’d submitted a bad script but passed with 65%. In December I was happy with my script and scored 40%. Very strange but obviously very happy.

The only difference I made in preparation was to look at 10-15 past questions and study the sample answers in detail to try and understand what the examiner was looking for.

[chris165]

I think it said the domestic currency had weakened and hence the revenue in the overseas currency would translate to a larger amount of domestic currency.

Therefore we need to reduce the revenue figure to get a fair comparable

[chris165]

Q1 reward system appraisal I did this badly but I tried to relate the two bonus schemes to the building block model described in the previous part of the question.

Basically scheme 1 was had no clarity and appeared to be unfair and uncontrollable so would not motivate employees. Only good thing was it involved shares

Scheme 2 involved employee participation so was more motivating and basically agreed with all other points of the building block model

Also the 50% bonus size should be a sensible amount to align the risk attitudes of the employees with the owners who wanted to see growth

[chris165]

I think we’ve got to assume that they treated the machine purchase correctly and put it in fixed assets and hence it won’t affect the P&L so no adjustment is needed for this.

I also added that once we removed the uncontrollable costs, hitting the 8% target becomes significantly easier so the company may wish to raise this threshold

[chris165]

Time managed pretty badly. Expecting a fail for the second time sadly. It’s frustrating when I have passed the other 13 exams first time

[chris165]

Question 4 I adjusted revenue for exchange rate movement (down by 7.5%). Removed head office allocation, bad debt expense (noted I was assuming this is finance’s fault) and depreciation as they are not controllable by the manager. That gave a controllable margin of 11%

[chris165]

Exam technique is so vague – could mean a number of thinks imo and could be specific to P5.

General exam technique:
1. Apportion your time exactly according to marks per question. There are diminishing returns on marks gained the longer you spend you a question. We are taught that there is 1.8 minutes per mark, however if you attempt a 10 mark question it is likely the first 2 marks will be easy and less than a minute and the final 2 marks could take 5-10 minutes each. If you run out of time you will fail to pick up the easy marks on later questions.

2. Break down your answers to each requirement into subheadings. This helps to structure your answer which will both give you professional marks and makes your points more clear. This will mean less change of the examiner missing a mark worthy point in a wall of text.

3. Read the question carefully and make sure you understand exactly what the examiner wants before you start writing. This is perhaps more important for P5 than any other paper and I’m led to believe one of the main reasons the pass rate is so low.

P5 specific exam technique:

There are good technical articles about this – you should read them. Also look at sample answers.

1. I think one key point is never to describe models at all unless specifically asked to or if it adds weight to your answer.

For example a question asking what strategies a company should use:

Good: According to the BCG matrix xxx business area is a dog as it has a low market share (xx%) in a stagnant market (x% growth). Given the business is no longer making a profit, the company should look to divest the business in the most cost effective way possible.

Bad: The BCG matrix was developed to help companies classify their different businesses according to their market share and market growth, bla bla bla etc before getting to the point.

2. There are types of question which come up often. You should nail down effective ways to answer these.

For example: assess a performance report – remember you are assessing the report rather than the company performance – use the PAIL mnemonic. Look for whether there is a good balance of financial and non-financial KPI’s. Ensure the KPIs relate to the companies CSFs etc.

[chris165]

@ryansm05 said:
Hmm – seems harsh that probabilities were given to throw us. Information is almost always given to aid us?

Also, the question stated that the organisation were risk seeking, so an expected value analysis will surely be accepted (as would a MaxiMax).

In my opinion the question required both EV and maximax. It was for 17 marks…

the probabilities are used only in the EV calculations

[chris165]

@anastell said:
Yes, but you also have probability for each option and if you consider it then the results change.

A maximax calculation does not use probabilities as it is a technique for dealing with uncertainty.

The probabilities are for expected value analysis which is a technique for dealing with risk

[chris165]

Y/E 30 Apr 16
Total profit 132000
Bob Salary 18000
Bobs profit share 40% (132000-18000) = 45600

8 Months to 31 Dec 16
Total profit = 8/12 * 180000 = 120000
Bob Salary = 8/12 * 18000 = 12000
Bob Profit share = 40% (120000-12000) = 43200

Total Bob trading profits = 18000+45600+12000+43200 = 118800
Less overlap relief 25000
Assessable for Class 4 NIC £93800

[chris165]

You need 3 seperate calculations imo

Unincorporated:
Trading profits/ total income 55000
Less PA 10600
Subject to Income Tax 44400
Class 2 NIC 2.80*52
Class 4 NIC on 55000-8060@9% + remainder at 2%
Then post tax income is 55000 – IT – Class 2 NIC – Class 4 NIC

Incorporated:
First work out gross dividend by reverse engineering IT computation
Desired taxable income = BRB threshold = 31785
Add PA 10600
Less Salary 24000
So gross dividend = 18385

Then post tax income = 24000 – IT – Class 1 e’ee NIC + dividend (0% effective rate as BR taxpayer)

Can compare two figures here but important to realise that there is retained profits in the company which can be withdrawn as dividends at effective rate of 0% once his trading profits fall to £30000 after 31 Mar 2020.

Delayed distribution calculation
Company TTP 55000
Less salary 24000
Less E’er NIC on salary ((24000-8112)*13.8% – 2000 allowance)
This leaves an amount assessable for CT
Less CT @20%
Less dividend payed out as calculated above (remembering dividends are payed out of post tax profits)
This leave retained profits which can be paid out at a 0% effective rate after 31 Mar 2020 as a ‘delayed distribution’

[chris165]

@adil22 said:
How to calculate nic 4 in q4 part a ?

Class 4 NIC on cessation will apply to any trading profits which have yet to be assessed for the tax.

So use salary and PSA arrangement to work out trading profits for y/e 30 Apr 16 and 8 month period ending 31 Dec 16 when he is to retire. Then deduct the overlap profits of £25000.

Then the usual way: £42385-8060 @ 9% and remainder above the threshold at 2%

[chris165]

Here’s my maximax calculation. I think I remember the numbers correctly:

Here was data given in question:
Sales/unit c/s ratio Days in year Fixed Costs
Project A 3.8 58% 360 900000
Project B 4 59% 360 980000
Project C 4.2 63% 360 1120000

Then the one way data table is as follows:

For example for project A at 1200 demand, profit = 1200*3.8*58%*360-900000 = 52128

Project A Project B Project C
1200 52128 39520 23072
1400 210816 209440 213584
1600 369504 379360 404096

So under maximax project C is the choice giving a maximum possible profit after fixed costs of £404096 if the demand is 1600.

[chris165]

Paper was fair I think. I ran out of time and left 14 marks unanswered on Q4 but I feel I should have answered the other questions well enough to pass.

Q5 was a complete gift for me since I just read about share option plans the night before 🙂

[chris165]

Looks good except question explicitly said days were 360. No annuity tables required lol.

I thought the exchange rate moved favourably also

[chris165]

I thought this was ok. Had been having nightmares about this exam having looked through past questions and answers.

1. a) Evaluation the performance report and choice of performance measures – looked pretty standard type question – everything financial no NFKPIs etc
b) What gets measured gets done – no KPIs for clean restaurants, tasty food fast service which is what customers want so should measure them. Franchisees struggling with cost control – so break down other costs into items which can be controlled.
c) Choice of project – one exogenous variable – demand so one way data table required.
I got EVs slightly over £200k for each with project B best. However given EVs are close and not that useful in one off scenarios maybe use maximax which chooses project C and consistent with boards risk appetite. Don’t really see the point of calculating maximin or minimax regret as not really relevant but it was for 17 marks so what do I know
d) Importance of brand image/ management
Better brand can charge more fees in the future as more attractive investment.

2. a) Nice question but adjustments a bit fiddly, especially the exchange rate and fuel tax where you have to apply the change to only a portion of the COS/ delivery costs. I got there but over ran a bit. I got $6100kish operational profit for the year
b) Rolling budget/ incremental budget. Obv dairy needs an incremental and luxury a rolling. Loads of easy marks here but only had about 7-8 minutes for this so was kicking myself a bit.

4. a) Easy Z-score calcs. I got 4.17 so close to the risk of failure boundary of 4. Then the standard reasons which quantitative measures using financial ratios are bad
b) Liquidity assessment – I only calculated the current ratio here – saw it decreased by 46% or something over the two years. Also had been missing loan payments so company at risk of failure based on this. Don’t know if there was anything else to say here – I remember some figures about free cash flow but didn’t have time to think about it.
c) Factors for failure – stole the defects and mistakes headings from Argenti’s model and made a couple of points

[chris165]

Definitely possible. I work full time and passed three exams in a sitting twice. (F6,F7,F8 in Jun 15 and F5,F9,P3 in Dec 15).

Two P papers is harder than three F papers in my opinion.

You do need to be organised with your time though and this is a real commitment. Make sure you start plenty in advance and don’t leave most of it for the final 2-3 weeks.

Can always use holiday for extra study days if you need to.

[chris165]

Seems a little pointless even if you were able to do it.

Get a relevant job so you can start the clock ticking on your 3 years relevant work experience. That will be the bottleneck to becoming an ACCA member for anyone who is good at exams.

Good work experience is at least as valuable to any employers then how many exams you have passed.

Maybe your employer will even pay for exams/ tuition so you will be quids in.

[chris165]

Will differ from person to person and if you are more numerically minded or better at written papers. This was my experience.

I’d argue that F7 and F9 contain the most material and F9 is technically the toughest to pass.

F5 has quite a lot of subject matter but is pretty straightforward in that no great depth is gone in to.

F6 tax is just a bunch of rules, all quite straightforward except inheritance tax is a bit more complex.

F8 imo is the smallest syllabus and probably least time consuming but is a written paper so you will find it easy only if you are good at expressing yourself clearly in the exam.

In summary I’d pick F5, F6 or F8 depending on your own strengths.

[chris165]

Don’t want to sound harsh but if you failed F8, it’s pretty unlikely you will pass P1-P3 in the same session unless there were extreme mitigating circumstances.

In my opinion the P papers (possibly excluding P1) are much more difficult than the F papers and require around twice as much study.

I’d agree with the above advice and take P1 and P3 only.

[chris165]

64% now just options to go 🙂

[chris165]

@Cardine said:
Colleague,

This normally be the case as the results are being uploaded, which will be available on the date anounced for results release.

I can tell you – ALL the papers are in and they may be crossing checking while putting the information on your home page – myacca. Data errors is what they’re trying to prevent. This does not eliminate errors, but to some extent curtails mistakes.

I believe most time I’ve passed my exams and the data imputed back-way – 54 as 45; it’s amaizing when I calculate my results after exams – declearing 70’s and over; the examiner pitty me with marginal fail grade. So with 47 I know I did well and achieve 74, but administration will not accept their mistake.

Please do not pay for administrative review; this is just more stress and waste of valuable funds.

Best wishes to everyone – ALL admin errors MUST BE in your favour and not against you. Thank the creator for ALL which is possible with PASS that you’ll not do the paper(s) again. It’s time to move up the ladder.

Regards,

Just make sure your result ends in a 9 next time…………………..

[chris165]

Hi,

I was a bit similar to you in that I started ACCA at age 30 and had to deal with a 2:2 degree and a large CV gap. You should be able to make your sales experience work for you though it will help you answer the core competences questions at interview such as (when have you worked part of a team?, give an advantage of when you have influenced someone? etc).

You will need to give good reasons why you want to be an accountant. It’s best if they are kind of individual to you and not template answers as people will see through this.

Why do you want to quit sales? The people I know in sales make quite a lot of money and need to be a lot less technically competent than accountants. However I respect that being successful requires a certain type of personality.

The 2:2 thing is an issue. It’s sad but it’s true, particularly if you got your degree from a good university and you see the standard of the degrees from some of the lower tier ones which are no more than glorified A-levels. I’d advise looking at smaller companies who will look at your application more personally although there is no downside to applying to the bigger ones also. You also may get questions like “you seem smart, why the 2:2?”. They probably know it’s because you were out drinking five times a week even in exam term but try to be prepared to answer this also.

To answer your particular questions:

1. No, don’t do more than the first computer based ones (F1-F3). Time is ticking and it will take you an absolute minimum of 4 years to be earning a good salary (£50k+) because the company will likely be funding your study also. Also it will make the exams easier as you will be able to see some of what you are studying in context.

For me I did a couple of ACA exams to help show my commitment to accountancy. It’s very possible to score 80%+ on the first few exams which will help impress potential employers.

2. You shouldn’t have to volunteer. It’s not media or anything like that. You can directly add value to someone’s business and should be rewarded for that. Find out a list of small accountancy practices in your area and contact them to see if you can work for them on Saturdays just doing their basic tasks. I managed to get someone to take me on on a zero-hours contract doing this (see they are not always bad…) and it helped me become familiar with basic accounting transactions and accountancy software.

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