[Edward]

Hi Ken

Kaplan textbook advises amortisation of advertising, R&D and employee training should be deducted from NOPAT. is the treatment difference to goodwill is that goodwill has already being deducted while in the case of the above we wouldn’t normally depreciate?

Thanks

Ed

[Edward]

That’s excellent. In Dec 15 you could only write on the exam paper not the answer book in the first 15 mins. Atleast now u can map your answer on the answer book straight away and hopefully get a mark for it where before u might not of had 15 mins to do that.

Thanks for confirming

Ed

[Edward]

Hi

Any reason why they got rid of Beyond Budgeting? It was such a big section before and relevant that I’m curious why.

Regards

Ed

[Edward]

Thanks Gromit,

Forgot that current operating profit equals all products sold and not just shoes. Will be more careful next time not to reach such quick conclusions.

Regards,

Ed

[Edward]

Confirmed. Ansoff is no longer required

[Edward]

Hi Gromit,

Is there anything you can do to prepare for these calculation questions as there outside of the syllabus requirements. Between this question and BEC, I’m struggling to understand one how somebody would have the time to complete these in the exam, given the number of calculations required and secondly the calculations require more logic than theory.

I’m guess I’m answering my own question here but appreciate if there is anything else we should be using to practice for these type of questions.

Thanks,

Ed

[Edward]

Hi Gromit,

You can ignore the second part to the above question as I see other non-cash expense is added to the second year. Not added to the first year as you would be using the 2005 capital employed figure.

Thanks,

Ed

[Edward]

Thanks Gromit,

That clears that up for me.

For the same question part B (I), can EVA be calculated from the operating profit (Profit before tax), rather than the Profit after tax? I see solution has used PAT. Was trying to use the other profit figure but I couldn’t get it to calculate back for me.

Also, I see the solution hasn’t added back the other non-cash expense to the capital employed. Why is this the case? I taught this should be added back to retained profits at the end of each year.

Appreciate your help.

Thanks,

Ed

[Edward]

Thanks Rashid,

I’ll be conscious of this in the exam and if no reinvestment rate, I will state my assumption that reinvestment rate is same as cost of capital as outlined above.

Regards,

Ed

[Edward]

Hi Gromit,

Under this question I see the cash inflows for MIRR are calculated using the 4.5% deposit return rather than the 12.5% cost of capital. Why is this the case?

Thanks,

Ed

[Edward]

Thanks.

Going through solutions can be painful when no one will have the same answer but at the same time, trying to hit key points. Struggle sometimes is, is knowing what the key points are. 🙂

appreciate your help.

ed

[Edward]

Thanks for that.

[Edward]

Hi Mike

Just wanted to say I passed 2nd time round and found the above explanation key in securing the pass.

Many Thanks for everything and look forward all going well to passing last exam now in Dec.

Thank you
Ed

[Edward]

Thanks Mike

regards time for planning, I mean don’t just rush into the answer, spend that minute longer analysing exactly what’s being asked of.

Really appreciate the above though.That’s finally cleared it up for me. Just need to go away now and practice a few and makesure I have this covered before Monday.

You’ve been a great help these past 3 weeks so thank you.

regards,

ed

[Edward]

Thanks Mike

So based on that, for evaluation in this scenario, would you look to establish what are the greatest audit risks are and in list them in your answer as best as possible? It would mean spending that bit more time planning and looking to weigh up how information presented is connected and whether there is arguments for and against why it is an audit risk and looking to quantify those risks also to further make your point (materiality)??

Regards
Ed

[Edward]

Brilliant…Won’t waste time on that then. I thought if you referenced back to relevant standard it showed a complete understanding of what u were talking about. Good to know…I’ll just focus on improving my understanding of the rules behind the various standards then.

Thanks for this.

Ed

[Edward]

Thanks Nadha. appreciate the response. This makes sense.

[Author]

Posts