[wyyy]

You are very welcome!

[wyyy]

Congratulations for those who pass. For those can’t make it, don’t give up 🙂
I get 45 at first attempt and 74 at second attempt.
Here are few things I would like to share.
If u fail at first sitting, take time to reflect what are the reasons.
During my first sitting, I can’t finish all questions because I spent a lot of time on first question, to recall the accounting principles to apply in audit risk question. 

For this, I conclude the reasons of my failure:
1. Poor time management
2. Not get used to the subject matter and this causes more time spent to recall the knowledge   

For my second attempt preparation, I go through all bpp revision kit questions in order to understand all the subject matters and learn how to apply it to secnario. Also, familiar myself with all the accounting standards especially those appears in revision kit and pass year questions. 

There are repeated audit questions and some are quite ‘theoretical’. You can be well prepared for this kind of question. For example, safeguard or action for different threat events, matters to include in tender, feature of transnational audit, matters to consider when use of auditors expert, extent of reliance placed on the work of component auditor and internal audit.
Make your own note for these questions, remember the key words for all the answers. It helps you to save time during exam.

After understand all the subject matter, practice few mock tests and pass year questions under exam time condition.
For time management, find out the way that suit you. You can get the idea from Opentuition article “How to tackle AAA exam”

During the exam, I spent around 10 minutes to look through all the question requirements and write down some exam technique and key words for more “theoretical” question. It helps me to develop the points quickly and more time to think on how to apply to scenario. By doing this, it also builds up your confidence level in the begining because you know what are you going to do next.

Time management is very important during exam. Don’t try to get your point perfect. Quickly make your point and move on. Make sure you complete all and you are likely to pass. 😀

[wyyy]

Hi tutor, I passed the March sitting. 😀

I really appreciate you for answering all my questions during my preparation. It helps me a lot. 🙂

[wyyy]

I am clear now. Thank you 🙂

Owh, I mean the point about government grant in marking scheme only about risk of condition not met
‘government grant-risk that conditions will not be met and a liability should be recognised for repayment of grant’
But not mention $20m should not included within operating profit as it has yet been spent.

[wyyy]

Alright, thank you very much!

[wyyy]

For the question of Francis (12/14),

‘A loan of $60milliom was taken out on 1 August 20X3 to help finance the acquisition. The loan carries an annual interest rate of 6%, with interest payment made annually in arrears. The loan will be repaid in 20 years at a premium of $5million’

The answer shows:
‘An effective interest rate should thus be used to allocate the premium over the 20-year life of the loan. There is a risk that the finance charge is not calculated using the effective rate or that the premium is recognised incorrectly’

I don’t get the picture of how to treat the premium. Is it treated as separate financial liability? Or add to the $60m when calculate financial liability c/d

[wyyy]

Then how is investment property’s impairment loss reversal? It does not capped at impairment loss previously recognised?

Thank you

[wyyy]

Ok, I get it now. Thank you very much!

For IFRS 9, I knew it’s usually initial recognise at FV then plus interest minus payment to get year end the figure.
May I know rationale behind the calculation? Use the above question as example, is that mean for the 37m loan, it repay some part at each year end (which is 3m). Then at the end of year 20, it will repay the remaining part of 37m (which is the financial liability we have calculated )

[wyyy]

Understand. Thank you.
So is it correct to say that for asset measured at revaluation model(and it revalued with sufficient regularity) , the selling price of it normally will not be significant difference as compared to its carrying amount. Thus, the profit gain normally will not be huge amount.

[wyyy]

2. How do we know the revaluation is out of date? Are we look at the date of revaluation? Or the big difference between carrying amount and selling price?

[wyyy]

The other side of double entry in SOPL can be offset.
I get it now. Thank you 🙂

[wyyy]

Thank you, I am clear now.
Therefore, the ACCA’s answer for this part is wrong too right?
“The fact that Bluebell Co has recognised a repair expense of $100 million indicates that either the buildings were not covered by adequate insurance (a business risk), or that the accounting implication of the reimbursement has been ignored.”

The provision & expense should be recognised if it meet IAS37 criteria, regardless of whether insurance claimable or not.

[wyyy]

Hi, thank you for explaining.

I wonder whether review of financial information technology system is also part of internal audit? (like review of internal control)

In the Q Nate & Co(b) (12/07), audit firm carry out review of the financial information technology system, but why the answer is not the same as Q Chennai? In Q Chennai, it should not offer the service as it relevant to financial reporting.
However in Q Nate&Co, it can offer the service provided appropriate safeguards in place.

Thank you.

[wyyy]

Understood. Thank you so much.

Can I continue to post other questions here? Because I couldn’t post it as it shows duplicate topic

For Sep 2018,
I have some question on answer for Q1(a) :
1) Under financial heading, 4th paragragh:
“the project will tie up considerable working capital over its lifetime”
Why it say so?

2) Under non-financial heading, 1st paragraph:
“the government believe that it will be possible to construct a road which is not significantly affected by pro blems with the terrain…”
But I couldn’t find it in the case. Is this assumption that we make?

Thank you.

[wyyy]

Passed at first attempt. Thanks to open tuition tutor for helping me out

[wyyy]

Hi,
May I know how about losses?
I saw in BPP revision kit pg335, the double entry for exchange loss (Full goodwill method) is :

Dr Other comprehensive income
Cr translation reserve
Cr Non-controlling interest

However, I wonder why CR translation reserve and NCI? It means increase translation reserve and NCI? but It’s exchange loss

Thank you.

[wyyy]

Hi,

Specimen exam 1

Thank you

[wyyy]

Hi,
For investment in debt measured at amortised cost, the transaction cost will added to its initial measurement. Fair value + transaction cost, will be its bal b/d

Only financial asset measured at FVTPL the transaction cost will expensed to P/L

[wyyy]

Hi,
I have question regarding this section too.
I saw in BPP revision kit pg335, the double entry for exchange loss (Full goodwill method) is :

Dr Other comprehensive income
Cr translation reserve
Cr Non-controlling interest

However, I wonder why CR translation reserve and NCI? It means increase translation reserve and NCI? but It’s exchange loss

Thank you.

[wyyy]

Yes, I mean RE plus OCE.
I made a mistake there

[wyyy]

Hi, thank you for clearing my doubts.

Here is an example, not sure whether I do it correctly..

On 1 December 20X0, Trail acquired 80% of the Dial’s 600 million $1 shares for a cash consideration of $800 million. At acquisition, the fair value of the non-controlling interest in Dial was $190 million. Trial wishes to measure the non-controlling interest at fair value at the date of acquisition. On 1 December 20X0, the retained earnings of Dial were $300 million and other components of equity were $10million. The fair value of Dial’s net assets was equivalent to their book value.
On 30 November 20X1, Trail sold a 5% shareholding in Dial for $60 million. At 30 November 20X1, Dial had retained earning of $450million and other components of equity of $30million.

Calculate the following figures in relation to Dial for inclusion in the consolidated of statement of financial position of the Trail group as at 30 November 20X1.
(a) increase in controlling interest
(b) adjustment in equity

(a)
first method:
NCI at acquisition 190
NCI share of post-acquisition RE to disposal 30
(450-300)x20%
NCI share of post-acquisition OCE to disposal 4
(30-10)x20%
NCI at date of disposal 224
Increase in NCI (224×5%/20%) 56
NCI at the year end 280
Therefore, the increase in NCI is 56.

Second method:
Net assets of Bochem at the date of sale:
Net asset at 30 November 20X1-1080
(600+450+30)
Goodwill (800+190-600-320)-70
Total net asset – 1150
The NCI will be allocated a 5% share of the net asset, which is 57.5 (1150×5%)
Therefore, the increase in NCI is 57.5

Are both answer correct?
Thank you.

[wyyy]

Noted. Thank you!

[Author]

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