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First question was the most challenging that I ever saw for a consolidation scenario. Q1 part a was a reverse of calculations with subsidiary for goodwill already provided, missing piece was purchase consideration and apportionment of subsidiary results with fv adjustment and part disposal of subsidiary. 5 marks only allocated for this part of the question whereas the answer takes more than twice of the time required and had to move to other questions instead. Part b and c of Q1 was also on consolidation. Q2 part a was on ethics and fundamental principles with a lengthy and confusing scenario whereas part b required detailed explanations on finance v operating lease. Q3 was in 3 parts on accounting treatments – part a on IAS 1 with a fair discussion but difficult conclusion on substance over form; part b on IAS 20 and was ok and part c on IFRS 13 fair value which has not often been tested. No time for Q4 which included a question on operating segments.
I see the paper of yesterday as certainly one of the most challenging in the history of Advanced Financial Reporting / Corporate Reporting / SBR.
