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Hmm to say how nervous/unprepared I felt going in, I’d rate the paper okay.
From memory my questions were:
1) Preparing a memorandum to Hale on group aspects of ethics/prep Jeg Ltd, foreign entities, etc. (35 marks)
2) Income tax comp for Lucille, followed by foreign capital disposal and UK IHT planning. (25 marks)
3) (Answered these but drawing a complete blank on what the questions were now) (20 marks)
4) Terminal loss relief, sale of business assets, double taxation relief on savings (20 marks)Hopefully my last exam and feeling pretty good.
Best of luck all.Passed with 61%. I was confident I’d failed and so I’ve never been more relieved to get that text.
Congratulations to all passes and good luck for everyone moving forwards.
I’m hoping the ethical question was as straight forward as I interpreted. I thought it was especially generous that they gave marks for scepticism for this question.
The slides felt week for me, I really had to dig for relevant information and some answers were a big stretch, i.e. the last slide for culture, I mentioned organisational and power structures due to the changing management style. I stated rituals would be changed along with the use of technology day to day as well.
I figured q5 was only 13 (I think) marks over 3 slides so not much content was required.For q1 on changing structures, I felt I neglected two-tier boards in my studies as most mock and revision material focused on NEDs in a single tier board, so I’m hoping my observations weren’t too vague.
For the sale of the subsidiary I used mostly the analytical information from the recommended exhibit. However, I noticed on a separate exhibit, I think the newspaper article about medium sized firms, there was a subheading about management subsidiaries of audit firms, stating they’re hard to manage and the differing client bases make it impossible to cross-sell with audit firms. This swung it for me, I mentioned the Ashbridge portfolio display stating it was incompatible (alien territory).
I wasn’t sure if I was limited to just the exhibit mentioned in the question, but this extra information in another exhibit seemed too influential not to affect my decision to sell. I recommended the $25m could be used to invest in the new markets the large firms are diversifying to with high margins to get a share before saturation.
Otherwise as others have said, from the main exhibit, the 4 years total is less than $25m without considering time-value. Furthermore, the previous year actuals, the margin fell 8.5%, whereas the forecast stated margins would only fall 2% across the whole of the 4 years! This could be realistic, but seemed overoptimistic to me given recent actuals.
The section C factoring question caught me on the back foot.
I initially started calculating the overdraft interest saving from receivable days reducing from 71 to 35 based on the total receivables, completely missing the part about 80% of the invoices being advanced until after, so my workings will be fairly scrappy and I’m not sure I got the correct end result but I had it that the company would be out of overdraft with all the interest saved.With the fee and the 5% advance interest the factor would charged, I found it to be not financially viable due to the savings from administration, interest and lower bad debts being too low.
Also, on one of the follow up questions about the affect on the operating cycle, it asked about the impact if the factor was taken up, for which I just reduced receivables days down to 35 without factoring in the advance which I now think was incorrect.
Wished I’d spent more time revising factoring, specifically payment advances, but as others have said, it seemed so niche/straight-forward in the syllabus, it was easy to neglect.Interested to hear other’s thoughts on this question.
Brilliant, I assumed it was only one exam per account on Kaplan, but went for the full five and got them saving £45. Many thanks for that, I’ll be having a busy few evenings.
Could only get the one via BPP but at 6 total, that’s great.In response to the above, I can’t see them on my Kaplan account yet, but the email advises they can take up to 24 hours to appear. Have they since showed up on your Kaplan account?
