Forum Replies Created
- Posts
But the new company bought the off the shelf company on 20july, is it still possible to have a start date of 1july for this new companies financial statements?
Then any assets from the agreement/settlement with third company, effectively some cash and receivables for nil cost, will then have to be put on balance sheet as assets and credited to revenues, seeing that it was at nil cost..
Does this all sound right?
If the date of the agreement with the third party is 30jun, but the new company bought
first time got 49, now second time got 60 🙂
thanks opentuition… i only used opentuition and past exam papers 🙂teknoc….
you are right about the exam answers transparency…for ACCA they should be showing us all what being transparent means and looks like 🙂
i am not so sure that complaining will do much…
because it is quite clear that there are some tricks in the P5 exam, in terms of the questions… but that they all effectively relate to P5…Q1 and Q2 were rather clear, although i have never done nor seen an Activity-Based Budget, at least not with the info that was provided… so i went thru and pushed it to an activity-based absorption rate level, after using the % given to just redo the old budget…
i recall on a video one of the ACCA people saying that the P5 exam is actually easy, and that you just have to work out what the question is asking you….Q4 i never did, but Q3 i did, and i didnt figure out the confusion in the part A… it was simply relating to Performance Prism… so it seems… and if one gets that trick, then the question is rather easy…
i also did not subtract contribution for overproduced units, but i possibly picked the maximax and minimax correctly based on the incorrect numbers…i am hoping that my answers in Q1 and Q2 push me through my poor performance in Q3…
i think that the big trick with P5 is that you have to first work out what the question is asking, and to what exactly you are relating it to… because if you are confused or if you get it wrong, then you will not get the relevant marks 🙁
if i have to repeat P5 again then i have no problem, because I understand all the concepts and can relate to scenario…
but must do it on the day of the exam 🙂icedawn is right… the stakeholder question was a funny one, saying advice how this stuff could help performance management, and it is effectively covered by the Performance Prism;
Stakeholder Satisfaction and Contribution leading into Strategies, Processes and Capabilities..; hahaha…
how easy is that ??!!i answered it like a P3 question in the end, and i will be lucky to get about 5 or 6 od the 15 (?) marks 🙁
i still hope that i passed the overall exam… here’s hoping 🙂rst… i get you now… yes..; i think you are right, but partly… it would mean to take out the ‘contribution’ plus 5buck scrap cost for overproduced items and not the variable cost plus 5bucks…
faye…yeah i know it was 5bucks per unit demand over production scrappage… but the poster before me was stating that they took out variable costs on that amount of units above the produced figure… so i commented that i think that would be double counting the variable costs for scrapped items…
the unified database stuff in 2b did state i relation to improving performance, so it seemed like a general common sense and not analysing performance management techniques but the business detail itself… like if it was unified you could have Division A holiday info on internet and push those customers to book online and receive their bookings via the innovative smartphone tech that Divi B used…
likewise, the richer people buying the DiviC city breaks could receive some offers for the DiviA exotic holidays near the time like last minute cos the Divi A had the time for it and the money to pay for the DiviA holidays which were like 5times the price of DivB or Div C etc..
also could use the smartphone tech to give customers headsup on DivB non-peak times or vacancies during peak times, so they could then get booking etc…i thought the question in 2 partB, was asking for that sort of thing…
on top of centralised management being able to see what was going on in real time and not wait for year end to get all the info…the ABBudgetting made me freeze, then just started with the total of 520k and listed the 4 activities and split the total 520 figure by the % given for these activities… eg, 60% of 520k is 312k for that activity, and so on…
then under that, i worked out an activity based absorption rate for each activity, cos you could then have like $5.04/reworked reject, or $2,500 per week of quality seminars… that in itself was not a budget, but i added this stuff in cos the above stuff seemed to simple and i thought there must be a catch to it, and the absorption rates seemed like the only info one could get further out of the question…
just a question for the payoff matrix table…
why would you take out variable cost + $5 for the scrapped units ?
the variable costs have already been taken out in the first part of the equation when the contribution per unit has been used, then the fixed cost subtracted then only $5 per unit scrapped subtracted from that, right ?if you include variable costs with the $5 scrap cost, i think that for the scrapped units the variable costs are effectively being double-charged.
anyway, i got the regret matrix done as well, but it might have given me the same answer as the maximax and maximin, so i thought that i must have done something wrong…
did seem tough, but i have seen in some of these exams that some info is given later on, which you had to right up in previous sections, and yes part A was strangely written… it said advise how the analysis would help, but in the scenario it states to do the analysis, so best to do the analysis and state why its good to be done… i stated P3 stuff, about stakeholder negotations to get everyone ok with the required strategy etc…
first attempt… 49… real harsh, considering that in the final minute i saw a couple of easy calculation marks which i did not have time to finish…
real bummer…. excruciatingly painful… hahaha… 🙁hmm… was tough.. but i used a structured approach and walked away feeling that i put down enuff stuff as according to the marking scheme, therefore it depends on the quality so am hopeful to at least pass 🙂
Q1- yeah
Debt/equity ratio was ok at 50/50 and
had to include the tax part for pretax debt in WACC calc, and also use opening Capital not the closing figure…
add back the R&D to profit and capital….
and also only use Tax Paid for NOPAT not tax calculated..
and also the after tax Interest added back etcetc…
wasnt too sure about the marketing capex bit, so left it in Capital but took out of NOPAT.. haha…
Assumptions =easy ? =book depreciation is economic; no other non cash expenses; no GW written off…
-then i wrote almost a page on EVA being ok measure for shareholder wealth but that it was not good for division comparisons and therefore direct company comparisons and blabla, included those bits on ROI for example and mentioned that some non-financial stuff would give them clearer pic… (i did this cos in the text of the question is said that the CEO? wanted to know if EVA was any good, so i went beyond the direct Question bits on EVA calcs only… hope it gives me the marks i need 🙂 )weakness in KPIs was easy i think (3 marks)
alternative KPIs was ok (3marks)the rest of Q1 was a bit of this and that…
couldnot tie it all up in shorter paragraph so effectively linked bits directly… took a lot of time… but got thru it…
looked like the improvement projects would have varying effects on the CSFs and KPIs etc… for eg; JIT =Reduction in Waste, but for Greater Staff productivity No cos JIT might cause start-stop type system in production which would potentially increase idle time etc, yet for wastage reduction would be perfect..also the new info system… ERP -integration -perfect for JIT…
for Kaizan gives more info so can do the incremental improvements etc… (damn it!! forgot to mention the culture required… hmm..)
Quality control maybe better cos management has up to date and live info at hand etc…in general, i saw on the P5 ACCA pre-exam video that in P5 there was no right or wrong answer… so as long as you logically piece your stuff together and if it goes into some depth then i guess a pass should be had 🙂
Q2-Transfer Pricing…
geez… got stuck in like others then got really stuck…
then used structured approach going for the mark allocation…
realised the problem was that easily could see the planned change in TP policy being 625margin plus 10%, but what was the original… wouldve said the total 965(?) figure but via the overall text Hoots was wanting the proposal to give them more profit in low tax environment.. so figured the original might have just been RM charging them the marginal cost… and then the tax authorities wanting full cost meant the 965 value plus import tariffs…i think i got it ok in the end… in general it all fit together so i think that i pulled out of the “being stuck” bit ok… not 100% sure, but i think that i did the rest ok, cos it flowed with logic etc…
the specific factors… well…
tax rates; tax authorities regs; fx control; fx rates; internal policy etc…as to the proposed changes to performance measurement…
i stated straightforward bla about TP;
its for accountability, profits, motivation, comparison of divisional performance…
but that if they were loading the profits to Hoots due to getting the group better after tax profits that they would need to change the performance measurement manner so that RM was like a cost centre, whereas Hoots the profit centre…
i reckon i did the logical things, so would expect more than hope for a pass..Q4 -Balanced scorecard…
yeah… mentioned that it was non-fin and fin stuff, then listed thru the perspectives stating that fin (which was main one being used) was only for short-term but the other perspectives would give longer term stability etc… also the ROCE tied into that too… top heavy on old assets already depreciated etc, but would be bad results based on new costlier investments…
as i went thru the perspectives and explained them with couple sentences, i added one example of what performance measure the company could have for it… so hope that do really well in part Apart B i left for last, and i did the calcs on total people just as invigilator said stop writing… but i did all the text et al before it… so i potentially did not get a very easy mark or two, but whatever…
partC i did before partb cos thought it was rather logical and easy;
problems in selecting new performance measurements;
systems cant handle them; people not cooperating; management not understanding; unhappy shortterm shareholders cos shortterm fin ratios go down etcetc.. but also mentioned the obvious ways to sort them out, like better systems, training and education for management etc… just now remembered that it could be linked to appraisals/rewards…nevertheless, i think that i should have scored at least 50%…
my handwriting was horrible, but hope i passed cos i got the gist of everything 🙂oh yeah…
the 10% of Investment possibly being an Associate…
the 10% versus 20% dont make a difference…
if Significant influence does exist then it would have to be carried at Equity Method for Associates/JVs (i think)…
and it seemed as though Significant Influence was there seeing that they wanted to use their own channels to enhance the 10% company sales points etc…
so it was not just a hands-off 10% investment, but probably crossing over to an Associate-style relationship…nevertheless… these points are all arguementative…
however if they had the power to participate which seems like they might have, then its done…
but not sure whether it was something they wanted to do versus whether they could do…
so could go round in circles… haha…
but in exam i guess if you stated it all like that, you shouldve got decent mark…hope so anyway, cos i went for it like that…
yeah…
Q1 was lengthy but i used the layout from the ACCA P7 video for exam technique in order to grab as much of the 4 professional marks as possible…the Audit Risks were for 18marks…
so if 1.5 to 2 marks each, that means about 9 to 12 juicy sentences/paragraphs..
(from past papers, one can see that usually such a question has way more info and data than needed to get the full mark allotment)
i put in stuff like;
-couple points on Management Bias due to pressure from listing and bonus;
-couple points on FX issues;
-Rev Recognition due to advance payments;
-Inventory issues due to WIP and also the generic stuff lying around; -Sharebased payment not being recognised at grant date at fair value; -Revaluation exercise -reason for it? as it bumps up the asset value of company;
-couple points on Government Grant cos need to be sure that work is in deprived area and also that Deferred Income will not need to be returned seeing that the conditions need to remain over the next 5 years;
-potential lack of Provision for warranty terms etc…then added in for the further info required (5marks);
-reasons for Revalue exercise; more info on Gov Grant criteria and deprived area definition fulfilment; plus Provision for warranty calcs; plus Sharebased payment stuff etcetc…WIP (4 marks) =Inventory,
so lower of NRV vs Cost ? and included comment about faulty eqiupment returns; Inventory Count procedures done correctly in order to identify and segregate the WIP; plus documentation for relatedGov Grant (4marks);
Criteria fulfilled particularly the deprived areas work for the 2mill; correctly 8 mill on Deferred Inc or notQ2 – Kadinsky Going Concern issues;
there were quite a bit… just had to list them and state that it all pointed to inability to continue business if they did not find a longer term financing option before being hit and having the Insolvency actions begin..
i just think that i didnt explain what GC meant, but not sure if that sort of elementary level of info was needed…Q3 -from what i recall on 3 Matters plus Evidence…
first two cannot remember..
the Segment one was about them going to more relevant info…
but then had to say that it was ok as long as it was not less reliable etc..
then said that would have to be convinced with man’t reason behind it, and ask for the info in the former manner to see if there was any creative accounting being done…
but otherwise stated the elementary stuff like Segments need to cover 75% of revs/profits/ assets, even though it covered 100% 🙂the Audit Committee question for 6 marks;
haha… geez… rambled thru the entire CLARISSA Whistleblower list.. haha.. if i dont get the full 6, i wanna know why 🙂Q5 -not many seemed material…
the Lease was immaterial, but cos of Man’t refusal to change, it brought up question of Integrity – although not really enuff to change Audit Report, but enuff to mean extra Professional Scepticism required.. blabla.. i think that only the last part was material (by nature) even if not by amount… 2 to 3 of the 4 points didnt seem material… obviously getting to accumulation could get dicey…
seemed like a discussion topic rather than clear-cut answers 🙂overall, expect to at least pass…
possibly get a decent mark 🙂
if they dontfantastic..
got 70 🙂
well done opentuition !!!
(that goes with my June attempts F8 (76), P1 (51),
and now Sept attempts P2 (64) and P3 (70) !! 🙂 )absolutely fabulous…
i knew that i understood and possibly got a decent amount (about 30 to 35) of the Q1 50marker, but for the rest of the exam, i thought it would be really tough to have scrounged even about 15 or so of the other 50 marks on offer…
so thought id get about 45 to 48…
however, ended up with 64 !!!well done opentuition !!!
(that goes with my June attempts F8 (76), P1 (51), and now Sept attempts P2 (64) and P3 (70) !! 🙂 )joce.. youre right..
i have a feeling that for the Outsourcing question, that if you argued either way, but your arguments were backed by ample work, that then one might get most marks…
i read that one of the misgivings in previous P3 exams was that people didnt really push their point across hard enuff, so perhaps thise question was designed in such a way to give the possibility for arguing both sides..there was the cost side for the actual public though, and thats y i stuck with the No Outsource… the public could pay about 5bucks to the council annually for 7 years, after which full payback would be achieved with council upgrade, yet with only 50% based on survey paying 35bucks annually to GreenDream like forever plus the redundancies and cleanup of illegal dumpings, i found that a more precise or easier argument could be made for the No cause… however it depends on how the examiner envisaged the question… not up to us at all 🙂
joce.. i thought it effectively covered most or many of the 6 Is but if you look at the opentuition P3 slides pack on page 40 (slide120), under CRM you see that 2 or 3 of them are covered but the CRM theme lies around the relationship with the customer
so i would have thought that talking about 6 Is would get most of the marks but that itd have to be tied into the context well..
hmm.. haha.. i have no idea right now.. i read it as; a part of the council members that were opposed to the Outsourcing wanted you to do a financial evaluation for them.. so i interpreted it as asking to give a No Outsourcing answer..
but, i may have been structurally wrong..
however, there is also an added cost to the council for cleaning up the other households who would end up dumping their garden waste which would then need to be cleaned up at the councils cost; on top of redundancies etc..so who knows.. i guess we will soon find out what it really was..
tallaghthoop,
yeah.. forgot where that stakeholder management Need and Objective part question was nestled in the exam..
but put the usual.. Need is from potential stkholder conflicts due to varying views and needs, possibly causing detriment to achieving org objectives; and Objective of stkholder management is to keep shareholders happy with org strategy while stakeholders are ok with following it… etcetc… (no ‘etcetc’ on the exam though 🙂 )
what i meant with the Lease C is that if they had a provision for the future rent, that using the accruals principle they would need to offset the future years rent with an asset account, then increase the provision with unrolling of discount annually and dump it into the rent expense for that year.. strange on.. obviously valid reason for it being on the exam.. haha
Q2 and Q3; not sure how this went.. somewhere between ok to disaster.. haha
i capitalised the 5yr overhaul on the PPE but potentially its not capitalisable;
the deferred tax asset seemed strange for so much marks for such an obvious thing… i ended up saying that they should write it off or at least a substantial portion of it.. then after exam realised that it was 19milll netted off 3mill DFLiability, and that perhaps they should not have done it, cos the Liab part was for temp differences but the 19mill part for past losses on co. operations… i think that i lost some gimme marks again !!!
the licensing item i stated was a Finance Lease type arrangement, but that the lack of conclusion for economic benefit made it difficult at first for it to be included as an asset.. but they paid the full FV price and then % of future rev.. and it was effectively a specialised asset etcetc.. had confusing bits, but i think i may have got it in the end..
the part about the 65% in speecial vehicle, i said that substance of transaction means that the co. should capitalise on own books their part of the asset and the ongoing expenditure to develop it etc… think it was right…the OL and CGU part seemed really confusing, but i just did a straight forward, sum of all the figures and impaired the difference from the CV.. which Lease B giving a negative value so caused a Provision for that amount.. i kept thinking, surely there must be a catch to this somewhere which ihave not comprehended… will see 🙁
Lease C, i did a pv of the 3 years 50k rents in arrears (cos it was no breaking the lease clause, so a current and non-current liability once contract signed etc) then took off that amount the 70k or so that they paid one off immediately to in fact kill the lease, and the rest i said would have to go onto PL or OCI (cant remember) as Other Income cos it reversed previous provision… however i realise that potentially the previous provision might have had an account in assets under title of deferred rent etc.. not sure.. think i got something wrong in it..defined contributions vs benefit scheme.. thought that although risk to co. would indicate benefit scheme that it was only to cover the contributions in the first place that went to insurance company, and if they lost it the co. would need to top up and if they made something on it, then the co. would get this part back.. so ended up saying contributions a/c was ok… however the insurance co. stuff really confused me, and after the exam i remember the 30yrs at 5% part, thinking is the insurance co. like a Plan Asset vs Future Obligations thing… who knows ?
overall i think that i will be short of 50% but still hoping that decent performance in Q1 and some scrounging of marks thru Q2 and 3 get me over the line..
Q1 was a good one, but unfortunately left it for last yet it was the easiest of the lot..
the Associate was consolidated for half year, so just add 50% of that years P/L figures..
then had an amount for Share of Associate for the half year it was no longer a Subsidiary..the Impairment i thought i got right, but i did not in the end, add the current year earnings, so stuffed it up..
the Giles parts seemed like its increase in value that was due to equity asset at FVTOCI meant that the 20% portion of Assoc (for Field) of this part wold go to Fields OCI as Share of Giles, while the rest of the Giles increase in value would be netted off with the dividend paid out to give the P/L Share of Giles to Field.. i thought i got it right.. sure hope so..
the FX part.. thought it was as simple as the 20mill (?) kroner which were bought at purchase date to be paid some time later, silply had to be revalued on the SOFP figure at year end, and the difference went to the P/L but not sure if i put it in OCI… however i later thought its supposed to simply go to SOCIETY… so got some of it right and potentially a part wrong..
the share options… i got a figure of about 2.4 mill expense for that first year versus the 12mill that they had already included, so had to then do a correction on the consol for that.. i seemed to get it all right, but not sure if the 2.4mill figure was correct in the end.. i think it was like 21k-3k=18k by 200 options by $2 (?) at fair value.. gives about $7.2mill worth, But it was over 3 years, so then got the 2.4 mill.. hope it was right..
the PPE to IP reval i remembered that all IP reclassification goes to P/L except for PPE to IP reclassification revalue… that goes to Reval Reserve (if positive), then all else to P/L so i had the first reval to Reval and then second revaluation while it was already IP going to P/L… i think that the parent already had 4mill in reval of asset in the oci so it didnt need to be included there.. hope i got it right 🙂
then there was the deemed disposal on the assoc that became a subsidiary.. i hope i got that right.. haha..
1b was ok.. i think that the potential cash transaction would do nothing to Field, but if the loan was converted to shares as it was the more profitable for holders, then Field would go from 25% of 20mill shares giving 5mill holding to 5mill into 32mill (with the extra 12 mill shares) so their interest would go down to about 15.6% and potential interest in Equity versus Assoc..
i then blabbed on about how this would not in itself mean that Field drops it as an Assoc, cos if the bond holders were very wide so that there was no real extra influence from the 12 mill new shares, that it was possilble for Field to remain with Significant influence etc..
was running out of time, so then quickly listed a few bits of what significant influence was.1c seemed like a lot of marks for simple stuff.. cos the FD cannot offset PPE impairment against revenue… its not IAS/IFRS compliant.. then mentioned that his manner of stiffing the employees by doing that was not good for the co. due to low morale etc.. then added the classic statement.. Ethical behaviour is of paramount importance blabla and the FD should do it all fair and transparent etc… was running out of time… couldve done better.. after the exam i recalled that i should have added that the FD is probably a qualified accountant and therefore tied to the professions ethical codes etc…and delved a bit into it… on top of which i should have stated that dropping prices in PPR are not in themself an indication of impairment, but if the drop in the prices is more than what was expected, that that would then be an indicator for impairment….
anyway, i think that for the entire exam i might end up with a few short of 50%.. still hoping for the pass, but i think that i missed a great opportunity to nail it with such a straight forward Q1..
