[zhixiang85]

@jibri said:
Hi Zhixiang, I remember you from last sitting, how much you got last time? Q3b was definitely nasty, however I am still hopeful due to Q1 & Q2.

Last sitting was a 40, exam technique probably the cause eventhough i attempted 95% of the paper. There were too many paragraphs uptill last page of answer booklet i wrote perhaps hard to mark for examiner, wasn’t came about knowing the PERT answer format until I came across Point. Explain. Related. Timing

I am hoping as wel for Q1 and Q2 to pick most of the marks. Q3a was a rush to sell my ideas “Evaluate whether company should change to ABB” 5 points and a conclusion but probably won’t do so well, while Q3b was total wasted

[zhixiang85]

I received email from ACCA to complete a survey on June 2019 exam.

And I told whoever is concern to refer to this APM Poll especially Question 3b, however how serious will surveyor take candidates feedback is a different stories.

APM is not a straight forward test to the syllabus, so candidates really need time to plan how to address to the question requirments and generating ideas to the case scenarios under 3.15 Hours. We spent time studied so hard on the syllabus apart from our day job and a nasty Question such as 3b can messed up alot of people’s effort preparing for this.

[zhixiang85]

Q3a – think i didn’t write enough to explain why CRC should adopt ABB
Q3b – Don’t even know what the heck is going on after reading the question 3 times, i’m completely drown by all the 100,000 items in receipt, %, relevant details, figures back to the question.

Q2 (a) speaks about using Service Business characteristics using Heterogeneity, Perishability, Intangibility and Simultaneity and the problem with performance measurement, quality service and resources utilization.

I gave headings such as below, then apply the four service characteristics deem applicable for each problem headings.
1) Problems with performance measurement (hard to measure efficiency)
2) Problems with Quality Service (difficult to justify across dentist and patient demand)
3) Resources utilization (some patient needs more time e.g = more resources)

Q2 (b) Overall is unmotivating for dentist to pursue

e.g Profit on overall company perforamnce will encourage goal congurence in ECD, eliminate dysfunctional behavior, but individual wise will not be motivating as some work harder than the others will still get the same reward

e.g Encourage not to fail 10%, but does not take consideration of exceed expectation/needs – whats not measured will not get done. (there’s no no. of failure resovled been measured)

e.g 25% increase patient per day is not well justified – given scenario on competitors and fall in no. of patient in ECD. Dentist will be time pressured to rush the treatment, and hence patients requireds more time will seem as troublesome.

[zhixiang85]

I hated Question 3b (13 marks)
I don’t get what the heck was going on after rereading the case 3 times, and I’m drowned by all the figures, relevant information and all the 100,000 items in a receipt 20X5, 20X6, 20% and x% labour 000s / hr

0 Marks or maybe 0.5 mark for putting the headings 20×5 20×6 Variance

[zhixiang85]

This is my 3rd attempt on APM last March 2019

1st attempt – wrote 90% of the questions and got 29/100, heart sank to the bottom pit

2nd attempt – wrote 65% of the paper and got 40/100, expected failure since 35% left almost unanswered.

3rd attempt – wrote 90% to 95% this time, almost finished the answer booklet and tried real hard in answering the examiner’s questions, expecting a Pass, just oh God please I do not want the 1st attempt experience again!! fingers crossed

[zhixiang85]

Thanks for the input, yes i agreed on the above would sound forward looking on a positive note to the prospective employer. I live in Singapore

[zhixiang85]

I think since many are still concern about getting the right EVA amount, here’s something that can give us the idea of the marking scheme – December 2015 (Iron Chicken) Q1

Economic value added

Calculation:
1 mark for each of:
– Research and development
– Depreciation on leased assets
– Tax paid
– Capital employed year start figure
– Non-cash expenses
– Research and development
– WACC
– Economic value added
Maximum 8 marks

For our sitting (Vultures Retail) – since it’s a 14 marks asking students to
– Calculate the EVA
– Discuss the outcome
– Evaluation of EVA methods.

We can probably gauge how to allocation the 14 marks into those 3 parts. hence inaccurate EVA perhaps only loss 1 mark at most, but the rest in your workings still gain some marks. Most of the comments here got a Negative EVA, so the discussion part would probably be on right track.

Cheers!

[zhixiang85]

Transfer Pricing was my weakest topic and i was glad it didn’t came out 😀

[zhixiang85]

Qn 3.
Effectiveness School 1 wins – actual achievement vs expectation. later part on League table issue, there’s possible of ‘gaming’ due to different marking scheme. most lenient marking scheme could have generate high achievement than strict marking.

Efficiency School 1 wins – 57 students per teacher compare to 5 students per teacher in school 2. but again at a cost when school 1 teacher has to working 45 hours a week and the same salary as school 2 teacher, there in exchange of teacher satisfaction ratio and turnover

Economical School 2 – Staff x Average salary

there nothing in the league table displaying the rating for school meals, recreation facilities and living condition. The parent’s are confused by the league table itself because it’s difficult to prioritize. the highest amount of enrollment in school 1 could also due to geographical factor (accessibility to public transport) instead of the true credibility of the school – hope i didn’t write rubbish for this one.

[zhixiang85]

Elena – the ABM was my weakest write up, given time-pressured i was trying to read the case fast, but kind of information overload when case starts to mentioned the different material used for product type, customer type, and the new bespoke type. Thankfully the examiner did not provide another appendix filled with numbers for calculation.

as far limitation i had written
1) time required for staff to train moving from existing costing system to ABM, can be demotivating process
2) time consumption and complex due to the types of product and customers
3) historical data might be unsuitable to migrate into new ABM because of it’s existing format, difficult to break down into related activities
4) without investing into IT software, it would be too hard to handle for the amount of volume
5) the cost to upgrade might be more than being beneficial, if further need to engage with external expert – outsourcing.

[zhixiang85]

bennet846 – I did tried to spot if there’s some figures i can sort of “revived” the EVA into positive figure, but the question has too little adjustment and C/E is already at $9m at least, hence it is unlikely NOPAT will enough to tank the C/E deduction.

Any positive EVA might become contradicting because Actual P/L already showing a $500,000 net loss after tax. EPS if available will be negative

[zhixiang85]

Hi have something of a negative 8.8m EVA.

I’m surprise not much adjustment needed for any doubtful debt, accounting depreciation other than adding back:

Finance Cost 70% x $xxxx
Non Cash Expense $110k
R&D void for 20X4 $500k but, 75% in 20X5 which is $375k

Less Economic Depreciation $1m+. I didn’t find any accounting deprecation

C/E: using the beginning balance around $83m – $85m
only added back non-cash expense again $110k

WACC slightly above 10% (ke 14% x 65/100) + (kd 4.5%(1 – 0.3 tax) x 35/100

just hoping my workings gain some marks even though the end result might be wrong. but i thought about it, since Vultures Retail actual earnings is already Net Loss after tax, i don’t think i should have positive EVA in the light of it’s restructuring process and R&D cost for the artificial sweeteners, but who knows in future government might may more attention to raise tax again? nothing is guaranteed. If the board is rightly imagine about the fortune of Vultures, then investor might hoping to see a positive EVA in future.

Evaluation of EVA.
Merits
– adjusted to cash flow, hence unlikely subject to manipulation on accounting profit
– absolute value translate creating or destructive value
– comparative data for year on year basis if consistently used to track company performance

drawbacks
– in reality there’s 100+ adjustment, so it can be time consuming
– Not comparable to other business in the same industry of the different sizes
– short term focus rather than long term, subject to tunnel vision if using this measurement alone to make decision

[zhixiang85]

I was about to consider retaking AFM course, but thankfully that there are many who passed without offline course. Surely if i work hard enough this could save me $700+ using OT and BPP/Kaplan

[zhixiang85]

Thanks John, this is helpful. I think probably money changer shouldn’t have come to my mind considering the volume of forex transaction usually in Millions (US$). I’ll be watching your lectures soon, hopefully i can understand the relationship behind the numbers (e.g implication on interest rate risk with hedging technique such as money market when using Interbank Offered Rate).

[zhixiang85]

Wow 81% congrats! Are you working in a related field? If possible to share what resources you used and your study method please?

[zhixiang85]

For Q2 b) was ask to assess if Green / Blue Manager get the annual bonus.

Anyone use RI to calculate?
RI = Profit – (CE x WACC)
Green : +$2mil added value
Blue: -$9mil destroying value

I must say the question is vague, though ROI is the current measurement, but it did not ask the students to assess with ROI, given that one board member suggested the use of RI and capital structure 50:50 with 8% and 16% on cost (I think equity and debt respectively)

Maybe i’m wrong also since the 15% KPI was set for ROI

[zhixiang85]

Hi Trephena, would be awesome if I can have your advice on this.

Marker’s comments: “I feel that you have used the annual reports extensively and taken information that has been redrafted. As a result your analysis becomes more of a commentary than an evaluation. For topic 8 you are expected to analyse the financial performance by exploring profitability ratios, liquidity ratios and efficiency ratios in addition to investment ratios that you look at. This ratio analysis then needs to be fully benchmarked to Cathay Pacific. This ratio analysis should replace the discussion of the financials that you currently have. You may be able to use some of this information to help to explain relevant ratios but you will also have to look wider than the financial statements to take into account the economic, legal, political and social environment that the airlines operate in, as well as the impact of corporate strategy and industry effects. Make more connections between the financial analysis and the business analysis.”

I have tried very hard not to give the statement of the obvious, but I am not sure what it means “my analysis becomes more of a commentary than an evaluation”

The marker wants me to link my financial analysis and business analysis where I am using Ratios and PEST model. I am not sure how does Ratios should link to ‘Political & Social Factors’ for an Airline.

Was marker saying that my analysis on company’s Net Profit movement (Depreciation, Staff Cost and Fuel Cost) was useless information and should be replaced by more financial ratio and link to PEST ?

Ratio in my failed report: ROE, P/E, Gearing, Quick

I’m getting more stressful because the next submission period 34 would intrude my preparation for my P4 paper in June and I am still waiting for P2 result to be released in coming April. If I failed P2 again, might need to take 2 papers in June, that comes into this resubmission along with my job. Oh gosh!

Thanks!

[zhixiang85]

Good morning, anyone can please advise?

I am quite confused by the moderator’s comment that says: “You will also need to up date your financial statements to ensure that the most recent publicly available reports are used.”

I found one of the guideline produced by a mentor’s page, its seems like I do not need to update, but I’m not sure who is right.

https://www.annamentor.com/which-financial-statements-do-i-need-to-use-for-my-rap/

My previous submission on Period 33 used the data from FY2013/14, FY2014/15 and FY2015/16.

The year end for the selected Airline “Singapore Airlines” is 31st March, and the latest financial statement FY2016/17 is not published yet as of today! My resubmission will be 1st May 2017 onwards. Hope anyone can help. Thanks

[zhixiang85]

I hope the answers I gave does award some marks as everyone else who has the similar answers on Q2 and Q3

Q2
(a)
Company bought a building at cost which was fair valued at Y/E, the company decided to treated it at investment property.

I gave the answer that company has to revalued the building first before reclassify it as an investment property. The upward revalued property at Y/E was recognized in the Revaluation Reserve.

Dr. Accumulated Dep
Dr. PPE
Cr. Revaluation Reserve

Reclassify to Investment property

Dr. Investment Property – SOFP
Cr. PPE

Thereafter subsequent revalue down/upwards company has to first charge the downwards to Profit/Loss and reclassify the previous RR to Retain earning where appropriate.

The company still has to test for impairment when there’s indication that the property may be impaired

(b) Advise on Intangible assets where company acquires fully a subsidiaries that supplies motor vehicle. I assume that the Backlog order was an IA because it generates profit for the parent, but due to the rights of using water to manufacture vehicles came with a contractual limitation that if the subsi did not utilized the water for a period of years, the right will be revoke, hence the ownership is not fully transferred to the user, but I am quite confuse where in the question does the IA exist? is the Rights to use water or the Backlog Order an IA?

(c) CGU Impairment I have messed up by using the Cash Flow at PAT for Recoverable Amount, but it should be PBT as discounting technique does not apply to Tax. I hope to have some marks for the definition of Impairment and stating the indicator in the case scenario where the CGU was impaired.

The was an impairment amount at the end because CV > RA, I hope that was correct, but I did not apply the impairment loss allocation to first the Goodwill and the other assets on pro-rata basis for a CGU.

Q3
(a) The lease of car vehicle should an Operating Lease due to the contractual limitation for penalty above 10,000 miles, and customers are not allowed to drive outside the country’s jurisdiction. Moreover Lease Standard applies that the options to purchase at the end of lease period should be lower than market value, but in the case study the lessor is selling the customer at higher than market value. So it should be an Operating Lease.

(b) I was not well prepared for Debt Instrument, only to suggest the classification to NCA Held for Sale since it will be held until 1 March 2017 for sale, and the Y/E was 28 February 2017. (more than 1 year). This is wishfully for some compassionate 1 or 2 marks

(c) This was a quite challenging question for Contingent provisions and Assets. I suggested that no provision should be made since there was no amount on the Penalty can be reliably measured, and the chance for successful counter-claims against the contractor is not probable, as well as the Penalty. However disclose in FS when the amount can be measured is material.

Administrative cost expense to SOPL, and construction cost should be capitalized as part of the retail property.

– To back track on Q1, I did whatever I can for all the workings from group structure, FVNA, Goodwill, NCI and Group Reserve, and those adjustments. I still unable to tie between Total Assets and OE&L.

I wrote as much as I can (hopefully not nonsense in majority), but unable to complete everything due to the limited 3 hours 15 mins.

[zhixiang85]

@trephena Thanks for all the pointers, they are all really helpful tips for everyone doing T8. Glad that I had placed the PEST-analysis before drilling down to the financial ratios of the company/comparator. There were about 40 additional references (No Wikipedia/investopedia) made throughout to support the reason for company segments up/down %. All charts/graphs in my excel were made from scratch. I had worried unnecessary because in an event of resubmission due to a strict marker would clash my revision for June 2017 exam, but I should chill and certainly make contingency plan. Glad to came across Open Tuition, it’s certainly helpful.

[zhixiang85]

Hello, know that I am too late to worry about my submission for period 33 on T8.

I had used PEST model to analyze at country level on political stability, country’s GDP on disposable income on the middle class, and statistic on tourism which might seem to have relevant impact on the mainstream Airline representing the country, but I did not frequently explain how these macro factors would benefit/drawback to the Airline, will this pose a problem for me passing this project?

I was told by my mentor to use different colors on each different bar charts to demonstrate my IT skills, but with clarity on the chart details, would I still be penalized for being too colorful?

I was told by my mentor not to analyze too much on the comparator because the entire Part 3 should be talking about the main company I have selected, hence I have analyzed the service rankings between the two airlines based on Skytrax Awards, 4 Ratios on ROE, Gearing, Quick/Liquidity/ PE. WTI Oil price movement relating to the boost on Operating profit. And sometimes I used the 3rd and 4th comparator on a short sentence to justified a good/bad example.

Sorry I may be seem worrying this late, but have spent so much effort in the referencing from public Library/search engine and even paid $40 Turnit-In to ensure my gauge is below 5% probability towards plagiarism, getting into trouble re-amending the report again and again to almost Max word counts for all sections. Just do not want to fail. 🙂

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