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Well my first sitting at P5
I think I was kinda excited at first, I thought oh I know these questions. Then after I started writing I felt that – damn time pressure!!!! So many ideas and couldn’t put everything on pages.
Q1 – drew a prism tried to relate facets to incentives. – I think this was tricky, coz they wouldn’t link directly. Also when discussing stakeholders – applied mendelows matrix. But couldn’t decide what to do with suppliers, I said minimal effort since there was a good competition among them.
For benchmarking – calculated KPI’s and compared to general machines. The trick was to get capital employed figure. Lol in previous exams capital employed was always given, so I stick at this. First I took total assets and calculated ROCE and EVA, but got negative numbers. Then after recalling what was capital employed I took Equity+long term liabilities. Bingo, I was right!
Wrote some difficulties in implementing JIT system.
Q2) I forgot to apply 3E’s here :(((( my bad. Said that nfpo are hard to measure performance due to many stakeholders. Also sources of information. Per my calculation of KPI’s BLA performed better than national average. It’s goal at the moment was cutting costs so instead of laying off people it could decrease salaries, as they were higher than national. Also it was meeting target to recycle waste at 43%, whereas target is 40%.
I even didn’t read Q3, as it was so long. Lol
Q4) gosh I kinda revised corporate failure but forgot many things. And at this point I was running out of time. I said that two models were different as one included x2 (forgot wat it was, guess pbit/total assets) and second had x6 (current liquidity ratio)
I said both ratios were important on its own. Q model was closer to 3, which means company should revise its performance and make sure there were no risks of failure.
Also wrote smth about decommissioning costs provision so that at the end it wouldn’t make it insolvent.
Mine life cycle = 23 years, right?
Last point on suggestion measures to avoid failure, was so short in answers like increase revenue, increase fixed price contracts number to avoid risks on spot market (dunno if it is right measure),I feel relieved but think I will need to re-sit in June :(((
briefly – in order to manage the performance, you should firstly measure it .
Are you sure year 2013 is $660,000 but not $880,000?
I suppose year 2014 would be $1,188,000 for 25,000 with inflation 8%
I’ll tell you my opinion after tomorrow’s exam. This will be my first attempt.
I wish everyone good luck!Wow- almost 83% for hard and disaster.
Sorry guys.I guess I was right not no choose this paper as optional. Let’s see what they have for tomorrow for P5 which I chose over P4….
Hello, I am not creating a new post as my Q relates to this scenario
I don’t understand the notion “tax on operating cash flow”. Please, refer to Workings of the answer to Q1. Why are they subtracting 9,360 as tax but not 540 as calculated as tax?
What I did was PAT+ depreciation = free cash flows,
i.e. 1,260+120,000= 121,260And per examiner: 31200-9360+120000=141280. I don’t get this. What about interest? Per scenario, only the principal is payable in 10years. And I assumed interest are payable every year.
Please, explain.its written about this theory in this article.
But I am re-reading it over and can’t understand where and how it can be applied.
Thanks for the explanation!
I have another question re EVA:
3) we calculate EVA at the particular moment using NOPAT for a particular period. Then why do we use capital employed AT THE BEGINING of THAT PERIOD? That data is outdated? Why don’t we use capital employed at the end or at least average capital employed (beginning+end)/2)?I am also expecting transfer pricing, mendelow’s matrix and balanced scorecard.
I asked the same here https://opentuition.com/topic/december-2013-2/
Just multiply VC by units (60*1.12 and so on)
Ok,
Please, explain why do we subtract adverse variance ($575k) to set new transfer pricing for housing components in June 2013, Q4, part a? Why using budgeted costs but not actual?
Thanks.
Thanks.
And also example 8, why 110? But in that case it’s cheaper for division B to purchase Externally for $100, no?
Another question regarding minimal regret.
In this example they Compare the worst regrets for each option. And get the least worst regret as an answer.
If I follow the method per Emily Wolf study book, I would sum up all regret amounts for each option and pick the least total regret. I came up with the same answer as in open tuition answer but still wonder which is best?
Their answer is contract 700 units with least regret of 800.
My solution:
Is the same 700 units but total regret for this option would be 1,500.
And 3,300 for 300units
1,900 for 500 units
1,800 for 800 units.Please give advice.
go to https://opentuition.com/acca/p7/p7-course-notes/
download the notes.
go to chapter 5 (page 33) – there you find what you need.
good luck.Hello Mike,
Please, refer to this link.
https://www.accaglobal.com/gb/en/student/acca-qual-student-journey/qual-resource/acca-qualification/p7/technical-articles/reporting-on-audited-financial-statements–significant-changes-p.htmlBut I am not sure about the status of the project. Was is approved? If not, then the format of the auditor’s opinion remains the same, i.e. Basis for qualified opinion then the opinion itself, right?
Please correct me if I am wrong. As far as I know, the company uses break up basis only when it is going concern. And the question here states that an auditor is happy with this method of accounting even though the company is not going concern. What am I missing?
Not going concern but still on alternative basis (which is if I am not wrong – fair value), is it allowed by IAS? If yes, then why unmodified with EOM?
Thanks!