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Second time I sat this exam. First time round I failed with 49% and most of the questions were about revenue recognition.. not my favourite section.
This time round, I found the section A & B to be tricky but ok as I had practiced a lot of impairments, financial instruments and EPS.
Section C…. first question I had the consolidated SPLOCI, really tough as Im sure I messed up on a lot of the workings but in general I knew the pro-forma and did pick up on the fact that the acquisition was a mid year purchase.
Second question, Cheese business… loved it! every single ratio I had on lock as I practiced September 2016 exam a night before and the section C was near identical to it. I made solid comments on the CEO’s comments about the financial performance and the state of the business and made a good argument (even though the ratios didn’t support his comments) that the CEO wouldn’t be saying anything else but praising the business considering the company is a listed entity!
We need 50% ladies and gentleman! That is all
I had the python and snake question but I think I’ve messed it up as I had negative goodwill (bargain purchase situation). The ratios weren’t bad but didn’t reach conclusion in end as it looked pretty bad but could be redeemable! You could easily work out ratios even if you didn’t remember them using previous years. The first section really confused me with the what amount would be chargeable for the 32m: 23.5/ 23.8 etc question for the service over 2 years and goods question section and then it continued over another question in year 2 which I had no clue about, this didn’t seem to appear on BPP syllabus unless I missed it
Iraitis, please tell me what you had put for you’re comments on cheese business ? I put they were heavily debt financed but I don’t know if I was barking up the wrong tree !
Messed my consolidated sporl completely forgot to include the revaluation despite calculating the revised depreciation.
Section a b was so hard ! No revenue % work completed contract, just discounted service package. Sale loss on disposal sub. Diluted eps.
Contingent liabilities on goodwill of sub.No leases or loan notes, just urgh!! What was this paper?
i completely didnt realise there was a revaluation surplus to be included too, however accounted for the depreciation! i had a question in section B how to account for revenue commission as being a agent for a travel company? i put down the commission of £150 as revenue and remaining as liability is that correct?
I also included very heavily debt but decent profitability.
@Nbhinder , i think i got profit of 3.9 mn after including profits of NCI share into NCI as we need to consider value of NCI on date of disposal
Hi Claire,
Please don’t accept my word as gospel as I did fail my first attempt.
For the commentary I argued that since the cheese business is in a supermarket industry the profit margins are small and the gearing tends to be high as that is how these businesses operate. I then commented on CEO comments that while the overall ROCE has decreased (small amount) which was technically a contradiction to the CEOs comments about the ROCE.
Even though the EPS had increased and net asset turnover showed it had increased also, the operating profit margin decreased largely thanks to the professional expenditure the company had to pay for to obtain the two new contracts with the suppliers.
In terms of the CEO comments, since the company was a listed entity a negative comment of any sorts would greatly impact the share price of the business and its marketability to any potential investors in the future.
I made the above comment following my observation that the business was highly geared and as such I recommended that in order for the company to seek future finance would be via a share issue rather than rights issue (less cash ultimately is received from rights issue) and that financing from further debt via bank would be a silly thing to do.
Does that make sense? or am I talking out of my arse?
Thank you Iraitis.
I failed f5 with a 47 previously and had a very similar question on ratios and commenting on performance so not a good history.
Similar to what I put although yours sounds much more developed.
I said it was highly geared and debt financed
Said operating profit reduced due to the prof expenses and increased cos.
Further debt not a good idea would decrease roce and eps?
Said they were diff to a supermarket as not cash sales so could be high receivables? Don’t know if this was completely wrong.
Section A was quite hard for me. Section C was fine. Hopefully, we can get the 50% guys. Im guessing it’s gonna be this close for me. Hope for the best for everyone here!
oh.. F5! My nemesis, I absolutely hated that exam. I passed it on my second attempt (lets hope I do the same on F7)
I don’t recall seeing high receivables in the SOFP?
One last comment, not sure what you made of that revaluation model comment, I just commented that it appeared that the non-current assets had increased by $20m over the year and it made sense for the company not to revalue their assets despite the fact that industry practice is to revalue rather than keeping it at cost basis.
Sec A was all mixed, with Revenue, Group
disposals and consolidation. Sec A is really a tricky one for me. Loved Sec B though, l had Revenue, leases and Impairment of Assets.
Sec C was actually a surprise as l was expecting consolidation, but l got Bike Group, to calculate ratios and gain/loss on disposal of a subsidiary. I also got a Single entity P&L and SOCIE! I was not prepared for that, l was expecting consolidation, either SFP OR P&L. Guess l have to wait for the resultsI hated f5 took me almost a year! 47 first attempt and only a 53 second.
There wasn’t any high receivables there were no liquidity info think I made that up. I thought usually supermarkets have high payables days so I thought being a supplier to supermarket they might have high receivables and low cash
That’s a good comment
I put historic cost model overstates profit and understates depreciation and something about not being of predictive value but that was all just guess work??
Hi, for Section C – cheese question did anyone notice that the total assets of the company did not match total equity + liabilities? I derived different results when calculating ROCE based on a capital employed defined as equity + non current liabilities and as total assets – current liabilities.
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Hi everyone,
I have found the exam tricky, bit confusing and challenging as well. I was very nervous about the time pressure and tensed. Looking at the time, ticking every second made me worried and could not think properly. My Brain refused to work as normal.
I have done a lot of practice and I was very confident to pass the exam now
I am not sure whether I will pass or not. I didn’t have the time to answer Section C – Ratio Analysis Question at all. So out of 80 marks, I have to get at least 50.
Q 31 – SOPLOCI and SOCIE with lots of (7 notes) adjustments. This Question took longer than expected it was very challenging to what I learned from Kaplan and BPP and ACCA pass papers, Question was slightly Differently set. Redeemable preference shares etc.I could not think clearly under pressure.
NBhinder – I think I got the same paper as you. If you reply to my message we can talk about it.
SECTION A – Q2 Dividend yield 12% MV Share $16 calculate price per share?
12% = $1.92/$16*100 answer is $1.92 . Anyone remember this Question?
First I entered the right answer because I was rushing to answer this question only 30 seconds to finish the exam I changed to $1.30 got confused because I didn’t have enough time to read the Question fully. Exam was ended automatically.After the exam I realised the mistake I should not have changed the answer.
Anyone else got the same paper? I had my exam in London Oval. Self study.
Hi Lalitha,
I got same paper, for the question you mentioned i think the answer is 1.92, redeemable shares should be treated as long term liability not into equity, and we need to calculate interest same like lease i guess. I did that way
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Q31 Do you remember the name of the company? Contran Co. or something did you get the same question SOPLOCI and SOCIE? 7 notes adjustments.
Yes i got 7 notes question and 31) question is related to bike co and scooter co
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Yes. I did showed on the separate column in SOCIE. 600 dividend paid.
Im not sure if we have to show that dividend, as that dividend is not actually dividend its financial cost, it should be treated as interest. I might be wrong
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Sorry Q 32 Contran Co or something. not Q31 Ratio analysis question – I didn’t have the time. I didn’t even read the name of company or question no time.
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Preference redeemable shares – Only remember showing in the SOCIE I don’t remember whether I included in the P/L Finance Cost. I was just rushing.
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Pjashu1995 – How did you find the exam overall?
I dont think i did well,,, i struggled a lot in exam and find it really challenging…. Just hoping to get passed. However i some how attended all questions… Not sure if they are right or wrong
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I think you are right. 6% Redeemable preference shares – Non Current Liabilities . You have to pay interest.
I know that. Irredeemable preference shares – Treated as EQUITY shares.But I don’t remember whether I included in the Finance cost or not I was very tensed.
Hi, I got so fed up with section C question, I lost the plot mid way through it. Why do they want to test every thing in each question. It’s like setting up to fail the exam. I got so fed up that I could not concentrate on easy questions as well. It’s hard to work on that small work space with so many requirements linking into each other. It could be just me only. I felt even the OTs were all trying to through a googly at you. In real world scenarios you don’t have to remember each and everything…..you can always refer to related material available.
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