SBR*** ACCA P2 September 2017 Exam was.. Instant Poll and comments ***

IASB offers an exemption for low value assets (assets with a value of $5,000 or less when new). Low value assets meeting this exemption do not have to be recognised on the balance sheet. If you wrote something on same lines, it should be fine.

@tayyabom said: My approach was similar to rogman228. 3) about revenue question, I deducted 0.8 from 3.6 million to recognize using "at" and 0.8 over a period of 10 years because warranty and service contract cannot be further unbundled. and service contract length was 10 years.

The revenue question for IFRS 15, does the 3.6m include the 2 years warranty + 10 years maintenance?I cannot recall the question & the breakdown. I remember a figure is given for the prd+2 years warranty but it does not include the 10 years maintenance

Guys, how do I study P2. Majority of you voted as 'hard'. I am nervous for Dec exam now.

@sakuraf4 said: The revenue question for IFRS 15, does the 3.6m include the 2 years warranty + 10 years maintenance?I cannot recall the question & the breakdown. I remember a figure is given for the prd+2 years warranty but it does not include the 10 years maintenance

Hi, There were three components: 1) Turbine $2.8m 2) 2 Years warranty + 10 service contract $0.9m, this was one item, remember there is difference between warranty and service contract 3) 10 years extended warranty (this didn't have service contract element). $0.8m This is as far as my memory goes, $0.9m and $0.8m might be interchangeable but I'm reasonably certain that it was 2 Years Warranty + 10 Years Service contract as one item.

@rvy17 said: Guys, how do I study P2. Majority of you voted as 'hard'. I am nervous for Dec exam now.

Wait till our results, if we pass we'll surely pass on our good advice, if failed we'll provide you with no to do list for this exam :) For Dec exam, it can be SFP, again there will be IFRS 16, IRFS 15 and IFRS 9. Remember September exam became difficult because of Cash Flow, no P2 student would like to see Cash Flow in his/her paper, this is the least prepared area. You replace this with Cons. SFP and you'll see many of those responses will turn from Hard to Ok. Did you get my point?

@tayyabom said: oh Ok, I remember now. Thanks. There were two issues here: 1) Capitalization of research costs, they had just got permission from regulatory authority to test/prototype the turbines and they had a dead end with some development. Commercial production had not been started yet. I mentioned the criteria of IAS 38, and mentioned something that since the testing under harsh conditions is not completed yet and they have doubts about the commercial production they shouldn't capitalize the testing expenses. 2) They were supplying the energy back to govt and this part was about recognition of revenue, the question was whether to recognize it? I mentioned that, if a contract exists as per IFRS 15 and company expects receipt of payment then they should recognize the revenue immediately at the time of delivery. Because when energy is transmitted to the national grid, risks and rewards are immediately transferred.

I treated the same like you, not capitalize the testing expenses. About the sale of energy, I think there is something wrong to recognize as revenue, as the turbines are in research phase. If the research fails, where to get energy to sell to government. I treated as other income in P&L. I had little time to read the question carefully, but it also can refer to government grant if there are conditions attached. I think the sale of energy could be treated as a deduction from research costs or other income.

Good luck to everyone. I just want to forget Tuesday ever happened and start prep for Dec.

I feel that if I fail this exam, this is due to Q1. I had done practice on both SFP's and cashflows but in my opinion, there are not enough practice questions dealing with cashflows (my study book had just 3 examples). Not to mention, in my BPP study book, of the 3 questions all of them had a statement of changes in equity, when the actual exam did not. There are so many questions on SFP's that you can have lots of practice and feel comfortable. It doesn't seem many students feel comfortable with cash flows, which I believe is an issue with lack of questions to practice. Frustrating to know if I failed, it was bad luck.

Regarding the lease exemption the examiner's article says: 3.4 A simplified approach for short-term or low-value leases A short-term lease is a lease that, at the date of commencement, has a term of 12 months or less. A lease that contains a purchase option cannot be a short-term lease. Lessees can elect to treat short-term leases by recognising the lease rentals as an expense over the lease term rather than recognising a ‘right of use asset’ and a lease liability. The election needs to be made for relevant leased assets on a ‘class-by-class’ basis. A similar election – on a lease-by-lease basis – can be made in respect of ‘low value assets’. The assessment of whether an underlying asset is of low value is performed on an absolute basis. Leases of low-value assets qualify for the simplified accounting treatment explained above regardless of whether those leases are material to the lessee. The assessment is not affected by the size, nature or circumstances of the lessee. Accordingly, different lessees are expected to reach the same conclusions about whether a particular underlying asset is of low value.

I might have been blind and not spotted something but did anyone see the value of the dividend paid by Mirror in Q1? What did I fail to spot/do? Very surprised there was no SOCE that was the first thing I looked for when I saw dividends but there was none. FWIW I did take some shot of it. I know dividends are paid from retained earning so done a retained earnings working and dividends paid was my balancing figure ha! Probably an epic fail but ah well hopefully I got enough to scrape a pass in the cash flow.

@rogman228 said: I might have been blind and not spotted something but did anyone see the value of the dividend paid by Mirror in Q1? What did I fail to spot/do? Very surprised there was no SOCE that was the first thing I looked for when I saw dividends but there was none. FWIW I did take some shot of it. I know dividends are paid from retained earning so done a retained earnings working and dividends paid was my balancing figure ha! Probably an epic fail but ah well hopefully I got enough to scrape a pass in the cash flow.

There a few items that make me confuse in the Cash Flow too Not sure if it is enough for me to pass :( In 1 of the note, the company paid a cash & issued a note of nominal value 46 & fair value of 48 to Glass. Do we take the fair value or nominal value to calculate the consideration paid?

I also was unsure of the dividend. I had a guess by assuming it was the difference in the T account.

i think i was 19 away from the net decrease in cash answer...i calculated the dividends paid to the nci but why do i recall being given a dividend for the parent. must be my mind playing tricks... anybody was able to calculate the deffered tax liability to use when finding the goodwill of the sub? mine was 1.6 and 2 for the deferred tax liabilities arising from the fv adjustments

do you still remember q4 was on which topic