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Arguably the toughest one I have attempted hitherto
A heavy focus on goodwill IFRS 15&16, IAS 37&38 But surprisingly absolutely no question from IAS 19, IFRS 2, and IFRS 9 ( all of which were either absent in FR or discussed to a smaller extent ). Similarly, it was shocking to no see any of IFRS 13, IFRS 36, and IAS 16 since these have been a common occurrence in the last few sessions.
Ideally, a paper is expected to be balanced and cover various standards from the syllabus such that it fairly represents the majority of the text, which clearly wasn’t the case in the exam.
The difficulty level in SBR had been on a rise since the last 3-4 sessions ( when juxtaposed with the ones from a few years back ), and in this paper, they took it to another level. Always they should consider extending the time if they want to keep that level of difficulty. A significant majority of questions were not understandable comfortably even post reading them twice or thrice. In other questions, too much was asked without giving many details.
In the first Q, deferred tax for 8 mks where barely 4 points were possible ( incl. the definition ). Other questions were explanations and differences between both the methods of goodwill calculations, a fairly better question on acquisition followed by an increase in shareholding.
In the 2nd Q, 10 + 2 for ethics on data breach wasn’t too bad. 3 mks for revenue and 5 for something else were slightly better too. Overall, the best question of the whole paper.
In the 3rd Q, many smaller parts include a focus on all the common standards like IAS 2, and IAS 37, i.a., however too less info and too much expectation.
In the 4th Q, a tech company ( and manufacturing entities ) and investor perspective and flaws of FR appeared for the first time. 6 + 2 mks, wasn’t too bad either although it consumed plenty of time. All the next sub-questions on lease and revenue were super tough.
Overall, a very difficult paper with a lot of twists & turns in a significant majority of questions.
Interested in discussing answers in detail? Email me at prgagapr@gmail.com.
My question paper was somewhat like this :
1. 50 marker ( NPV + APV )
( a ) 5 mks to discuss statements made by the Chairman & CEO apropos to gearing policy.
( b )19 marks for APV calculation ( incl 4 for discussion ). There was an equal installment bank loan. Pre-Tax CF was directly given for Phase 1 of the project. And post-tax ones for Phase 2 of the project.
5 mks for assumptions
5 mks for why APV is superior to NPV and the limitations of the method
( c ) 6 mks for factors that would encourage the company to start some non-polluting scooters quickly.Overall a slightly below-average question. A typical one, so something of that kind was expected.
The ( c ) part was very tough in my option, and despite reading multiple times, I couldn’t even make 2 proper points.
2. 25 marker – Valuation
( a ) 9 mks for FCF & NA method calculation
( b ) 11 mks for discussion as to which is most attractive of the three plans and other things directors should be informed or think about before making the final decision.Probably the hardest question in the paper set, the ( b ) part.
3. Hedging
( a ) 13 mks for forex heading – FRA, Options, Futures ( incl 4 for discussions )
( b ) 7 mks for the benefits of a separate treasury functionHad trouble dealing with the ( b ) part, probably only the second time it has ever come, adv & disadv of cent treasury is a popular one.
The only surprise was not to see the A&M question or reconstruction question. Unsurprisingly, the theory was very difficult and despite spending a long it was hard to make even half the points.
Overall, a less-than-good paper. Time management was slightly better than expected. And overall difficulty level was maybe as expected too.
My review of the ATX ( UK ) Exam June – 2022 :
The following were the most disastrous questions :
1. 9 damn mks for a ROR question with hardly 3 figures. No sub-question.
2. 9-odd damn mks for group relief question again hardly having 2 figures. No sub-question.
3. 6 mks for mortgage + interest implications.Hardly any popular topics appeared. No BPR, No GR, No BADR, No R&D, No SSE, No DGC, No Capital Gains Relief, No RBC, No VAT CGS, No VAT L&B.
Other topics having a reasonable chance of appearing like CFC, PE, Temporary Absence – CGT, Pensions, Charity exemption, Change of A/c date, and EMI, didn’t feature too! Around half of these were present in the S/D 2021 paper.
Amongst the popular ones, opening years LR appeared ( and obviously TR didn’t appear then ), and so did IHT UK R vs NR, ROR, BADR ( although in very limited detail ), Gift to Trust, GRG, VAT Registration, Calculation of ITL, DTR.
Compared with S/D 2021 paper, this paper expected far too much with fewer details at the disposal, and quite some topics that have less usually featured popped up. Sub-questions were very limited, difficultly level was higher than in the previous paper.
Loss on disposal of EIS shares probably appeared for the first time. CG getting crystalized in 10 yrs for depreciating assets for ROR purposes also probably made its debut. Given that PSC is examined limitedly as expressly given in the examiner reports, it wasn’t a surprise to not see it. However, a few liquidation criteria applicable to quality for capital receipts did come- two of which they had already mentioned in the question, and the four remaining had to be listed out.
The first question was good, it gave a fair indication that difficult ones are to follow and it happened! The second was average, and the third and short were nothing short of disaster majoritarian. The exam was time pressured indeed although as compared to past papers & mocks, better time management was possible.
Firstly, hats off to your memory. I got exactly the same paper, and you have put literally every question along with marks.