ACCA FR exam was – September 2021 Exam – Instant Poll and comments

It went well. The level of difficulty was the same as in practice materials (on some instances even much easier). I would outline the topics for today’s session, if it would be beneficial for future use:

Section A:
1. Calculate NCI share of PUP from inventory sold to Parent
2. Which two reasons are true regarding differences between principles based vs rules based accounting
3. Temporary taxable differences: Two examples of balances given (Interest receivables and payables). For one, timing of tax was different and for other it was in line. Question was regarding which of this balance had impact of temporary taxable difference and at what amount
4. Research & Development costs for project. Dates were given when the project started and when it got recognition criteria for capitalization (development cost). And we had to put given numbers in correct boxes – how much amount would go to PnL and how much to Financial Position
5. Definition of deferred tax asset/Provision of tax
6. IFRS 16 – 4 principles were given from with one was not accepted via IFRS 16 and we had to find that.
7. Calculation of Goodwill & Consideration paid
8. Inventory items given and its selling prices. We had to apply Lower of NRV/Cost model and choose correct inventory balances
9. Two Companies ABC co and XXX co. ABC had higher profit margin. Economy was in inflationary stage. Two options were given and we had to put boxes for which Company these statements were true (ABC or XXX). Options were: a) uses FIFO accounting. b) uses Cost model of accounting.
10. We had to calculate Contract Asset amount as per IFRS 15 (So, new method should be used. Revenue recognized up to date (based on completion)-cash received/paid)
11. Definition of Verifiability
12. Shor-term lease – which two options are False.

Section B:
1. Income taxes questions based on info given about tax provision/deferral and impact of revaluation transfer
2. Correct accounting Entry to be found when deferred tax is impacted during revaluation of assets
3. Leases and finding lease current portion of liability after year end
4. Impairment of CGU (to calculate new values of each asset)
5. Research and development costs – to e fount total value transferred to PnL (that was research costs plus amortization of capitalized development
6. Which intangible assets require annual impairment review? (Goodwill and Licence was correct as it had indefinite useful life)
7. Calculate net book values of PPE after multiple revaluations and depreciation

Section C:
Scenario 1:
Industry average figures given for hardware companies (stores). And Banksia Co company financials were given. Only thing was that Banksia used cost model of accounting and we had to make adjustment as if at the beginning of that financial year, Banksia implemented revaluation model. So cost of sales (depreciation expense), revaluation account and retained earnings were affected after adjustments. No other adjustments to be made. This question had 4 points.
Question 2 had 5 points and required to recalculate sector average ratios (Gross profit margin/oper.profit margin/ROCE/Gearing) based on initial (unadjusted) figures and than for adjusted figures.
Question 3 had 11 points and required us to assess performance and position of Banksia compared to its competitors (No comparative year given)

Scenario 2
Interestingly, only one question was in this part – Prepare consolidated statement of financial position with only Subsidiary (no associate). Details were mostly same – share issue in exchange and cash payment for consideration, intercompany selling land for gain, Cash in transit issue, Contingent liability increasing at reporting date but at acquisition it was correctly included it stated. One was also about subsidiary deciding to reduce allowance for irrecoverable debt.

my exam was same as you and different from the first comment

My variant was awful. Sections A and B tested every quirky rule under the sun. 60% of exam was consolidations, section C including.

Questions were so technical. Jeezz only few easy questions. All questions required a detailed knowledge of the standards. Overall was a good paper for me.

I had exactly the same paper.

hina128 wrote:section C had a very simple question on ratios just like the past papers and the second part was a full 20 mark question on preparing a SOFP consolidation, Mid-year acquisition with an associate too.

Probably, historic cost overstates profit during inflationary phase.

shelbywinter wrote:Do people get given different exams? My FR exam was not like george9710 mentioned.

I had the same questions. No. 1 was no. 2 for me and vice versa.

Yeah, people do get different sets of questions.

Grace how was your paper ?

GraceOla wrote:

shelbywinter wrote:Do people get given different exams? My FR exam was not like george9710 mentioned.

It was really hard, it tested core standards which took time to recall. So I couldn’t properly complete the Section C, part 2

Much more difficult than kit exam
No revenue , 5 test for lease !!
Many Tax questions !
Section C pAnd L was very difficult adjustment
Many revaluation and PPE !
Not all the syllables tested !
Much more difficult than what i have seen and solved in last past papers .
Specially question 32 !!

Who got the intangible assets question in section B? Was the answer neither ….

agboolakenny84 wrote:Grace how was your paper ?

It was much better than I expected. The level of difficulty was about the same (or even less) than the questions in the Kaplan exam kit.

How did you find the exam?

Yes this question. What did you choose ?

piotr88 wrote:Do you mean the question which of them should be the subject of impairment review?

I chose ‘neither’. I think that only goodwill and intangible assets with indefinite useful life have to be reviewed annually.

agboolakenny84 wrote:Yes this question. What did you choose ?

There was no ‘neither’ option.

I chose goodwill and patent only because the license had a definite lifespan.