AAA*** ACCA P7 September 2017 Exam was.. Instant Poll and comments ***

Can someone tell what was correct accounting treatment of Decommissioning Provision??

Q1: a(i) Business Risk- 10marks b(ii) Significant Romm- 10 marks c i Audit procedure on 10m claim- 5 marks c ii Additional information - 6 marks Q2: matter to consider and evidence expected to be found in file a- decommission costs - 10 marks b- depreciation - 7 marks c- Trade receivables - 8 marks Q4: Ethical and professional matters a) Dingo b) Pointer c) 20 marks Q5: a(i) Further Evidence to confirm sufficiency of audit evidence 7 a(ii) going concern audit procedures 7 marks c) critically appraise the Audit report 6marks

@wasimktk12345 said: Can someone tell what was correct accounting treatment of Decommissioning Provision??

https://www.ifrsbox.com/decommissioning-provision-ifrs/ I didn't get this right but I did say management shouldn't have been coming up with estimate themselves as it's very complex Never saw this on past exam papers

On Q2 did anyone mention that they thought management were trying to manipulate profits by removing the use expert for the decommissioning provision, changing the accounting policy for depreciation and the increase in receivables? Also mentioned increase in professional scepticism.

Tough exam. Q1 was very large and there were loads of different points I think that were valid as business risk. Food and drink if costs increase they will still have to pay for it if they want to maintain qulaity and if they lower quality then their reputation will suffer. I wrote about FX rate fluctuations causing business risks. Cashflow - they could be spending money prior to obligations being fulfilled especially as customers could refund up to a week prior to arrival date. Will edit this post when I remember the scenario.

As compared to june this is the worst attempt in terms of time management. I do a lot know in Q1 but soend a lot of time in selecting specific matters. Ran out of time for my last question definitely going to fail.

Could anyone tell me what Q3 (DD) specifically and marks allocated? Many thanks.

Can someone please let me know the requirements for deprec and trade receivables in Q2 ? Thanks

@spud said: Oh Thanks!!! ?? Yeah, what is NOCLAR?? ?

Non Compliance with Laws And Regulations. There is a technical article on the ACCA website & it was heavily tipped for this exam sitting

so glad i'm not the only one who thought the exam was time pressured.. I wasn't expecting to put up 2 hours for q1 and when i was done i realized i've only an hour left to the remaining 3 question. Ended up doing q3 and q5 , though now i wish i should have chosen q4. Hoping to pass, cannot study this paper again. Was literally panicking, hows a person to complete 3 questions in 1 or 1.5 hour? does handwriting matter? mine went down the drain in the last hour

Remember on the depreciation there was a change in accounting estimate in terms of IAS 8, the entity restated its opening balances retrospectively instead of prospectively as if it was a change in accounting policy. After taking materiality considerations into account PPE and Retained earnings were overstated if i can recall. Plus also disclosure considerations on the FS notes Provision for Decommissioning remember the client had a correct application of the provision however there are matters they have to take into account i.e. was the future cost of decommissioning Present Valued using a risk adjusted discount factor and element of unwinding annual being Dr P/L and Cr: Liability. Furthermore was the decommissioning costs added to the cost of the asset and was the decommissioning component depreciated annually over the useful economic life of the asset

Time pressure was the biggest issue here on question 1 but if you compare the paper to the June one, I felt this was a bit better. My strategy was I did question 1 and spend 1hr 15mins, then I quickly went to question 4 and 3 and I had 30 minutes left to do question 2 and I managed to do decommissioning and depreciation, receivables maybe 2 or 3 marks of work which was not too bad. In June I did P5 and it was very time pressured such that when they said 15 minutes do go that's when I started the last question and it had a long scenario. Everyone was complaining about the time pressure on Open tuition or anywhere else. I was shocked I passed it, so it goes on too say if you did well in the ones you wrote and everyone was time pressured they consider that. Best of luck everyone x

Hi guys, a quick question regarding q.1 on the 10m. since the question (if I remembered correctly) required procures, at which point would you mention NOCLAR?. Of course based on NOCLAR, as an auditor would have had the responsibility after following certain steps to proceed with reporting the noncompliance with regulations. Had the management of the HOTEL breached any of them at that time?. Best of luck to everybody

I didn't mention NoClar specifically because it didn't say that they had breached. However, I put that we should seek to get more information to determine if there was a breach .

About Question 1 (c), it was not actually a NOCLAR I think, more like a litigation case made against the client by an environmental pressure group. I finished about 85-90% of the paper. hope that what I wrote would be enough for a pass. There's various business risks to talk about in Q1 but due to time pressure I only wrote about 5 risks. Question 5 was quite easy. How were you all comment on the adequacy of the evidence obtained in part (a) (i) ? I didn't have much idea to write. But part (a) (ii) and (b) was indeed gifts. What's the matter with the impairment of receivables did you write? I only calculate materiality and talked about evidence. Totally forgot the impairment rules for receivables in IFRS9 to comment on the matters.

@spud said: Oh Thanks!!! ?? Yeah, what is NOCLAR?? ?

Non Compliance with Laws and Regulations

Hi! How did you prepare to P5 to be on time and to pass it?

Questions were standard but time pressured. As a participant noted, deciphering the scenarios take time. Supposedly part of our professional skills making this exam demanding as always. Hope for the best outcome as this is a resit for me also One more to go on Friday.

@hoangduchung1903 said: About Question 1 (c), it was not actually a NOCLAR I think, more like a litigation case made against the client by an environmental pressure group. I finished about 85-90% of the paper. hope that what I wrote would be enough for a pass. There's various business risks to talk about in Q1 but due to time pressure I only wrote about 5 risks. Question 5 was quite easy. How were you all comment on the adequacy of the evidence obtained in part (a) (i) ? I didn't have much idea to write. But part (a) (ii) and (b) was indeed gifts. What's the matter with the impairment of receivables did you write? I only calculate materiality and talked about evidence. Totally forgot the impairment rules for receivables in IFRS9 to comment on the matters.

I wasnt familiar with the IFRS9 so tried to use my own experience. For the impairment of Receivables I noticed that the company's policy was to impair residential receivables balances if they weren't paid after 90 days which seemed to be correct as the residential receivables days had grown over the year indicating more bad debt. However company policy for business receivables was to impair when the customer switched to another energy supplier. However, this doesn't mean the outstanding balance wouldn't he paid. So no need to impair. Also the business receivables days had reduced/improved over the year. So I suggested the company apply the same policy as per residential customers. This was a huge curve ball. When I don't know something, I just find the answer from life experience and then hope for the best!

I realised now that I wrote auditing procedures instead of edit evidence in Q 2 and Q 5 . i think that they will not give me the marks even my audit procedures are correct . What a mistake !

i failed also in june with 49 last lesson... i think it was a fair paper but so much to right .. i want 50 nothing else. i wrote all the questions with very hand writing at the end.. pray for me

relax, the difference between "procedure" and "evidence" is immaterial and markers ignore it.

Makers are harsh and hard if they can give 49% while u need a minimum of 50% to pass. Wouldn't they award you with 1mark maybe from professional marks and get pass. I find it so unreasonable that u can award student with 49% or 48%.

Two part in Q1 seems comfortable for me - I have attempted both at the same time, because business risk can cause risk of material misstatement. This decreases time pressure.

@raoul7370 said: relax, the difference between "procedure" and "evidence" is immaterial and markers ignore it.

Technical articles and trainee emphasys the importance to undestand this defference. Procedure - action, evidence - result of action.

@dianaspb said: Technical articles and trainee emphasys the importance to undestand this defference. Procedure - action, evidence - result of action.

Well what I wrote for evidence is what i expected to find (to be collected from the client) and the purpose of this evidence. I took the literal meaning of evidence. Hence i didn't say exactly that "obtain detailed fixed asset schedule and cast for arithmetical accuracy or reference prior year balances". Don't know if the markers will give me credit for that.

https://www.accaglobal.com/gb/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/noclar.html

Niche business. Adults only. Luxury business. Economic Recession ultimate hit. Farland; political instability. Hotel Complex - Prohibition of usage. I wrote them four. Because there were 10 marks. So 5 were enough. 2 mark each.

@spud said: For matters I put down materiality, was it material etc! Then the accounting standards to be adhered to for that area and what they have to do. Also if there was a risk of material misstatement. I used the same 3 of those for all 3 parts of the Q for the matters to be considered and tried to add one or 2 more where I could to get as many marks as possible ?

Matters to consider question was based on estimates in all three parts of it. One really can't put IAS 37 into a provisioning matter, IAS 16 into a depreciation matter or IFRS 9 into a receivable matter. They're all talking about estimates. Estimation itself is based on judgement and is prone to ROMM. Further, management bias had to included in depreciation and receivable matters. Because directly impacts profits (Bad debt expense, depreciation expense) and profits could be linked to bonuses.

@doublej2 said: I also wrote about the danger of water sports - If not maintained properly, might be dangerous for the guest. 2 hotels affected by hurricane. - If insurance cannot be used to cover, they risk GC because of lack of cash.

GC really? They had a chain of hotels, and only two of them were situated in hurricane prone area. But yes you could've used that point in a sense that losing a major customer base, had they located those two hotels somewhere else. (Opportunity cost)