FRACCA Paper FR September 2020 Exam was.. Instant Poll and comments

Did anyone got question on Demerger? (Working on the consolidated balance sheet to standalone)

We can all get different questions so need to worry. I had the same question as you, a 20 mark consolidated SFP. Hopefully, we’ve passed. Good luck

That’s good to hear! I made a few errors on the consolidated SFP question I had, which I wasn’t making in the practice papers, just exam nerves/pressure affecting me I suppose! It’s difficult to determine how many marks you’ll achieve on the ratio commentary questions, what I might think is a good point might not be good enough for them ????? Fingers crossed we’ve done enough. Good luck!

I manage to correct this at the last moment, I believe. I think it distorts the Current Ratio, since the rights issue is raising additional cash (Dr Cash), which has an impact on CA. I initially said ROCE, but the additional Share Premium is increasing the denominator and it actually lowers it down.

The exam was decent to hard. I got myself really annoyed how I got confused in A section, where there was a question for impairment allocation and if there is an order right after the goodwill write-off. Usually they are stated as intangibles and then tangibles, but there’s no damn order. Everything is pro-rated. This question was amazingly deceiving I would say. The funniest part is that the next question was the actual calculation and I’ve done it right there, haha. There was no deferred tax, leases, cash flow or financial instruments. A lot of revenue, consolidation, EPS, assets, provisions. The section C was really challenging as well, with a lot of things to consider. My statement didn’t balanced at all (around 195k on assets and 179 equity&liabilities), but I hope for good points nevertheless. The ratio question was really nice, giving you a lot of freedom to analyze it accordingly.

The rights issue was 1 for 4. Started with 12m shares taking it up to 15m. 12x4/12x6.4/7 15x8/12 There was a question about which ratios would decrease, I put all of them, I think it was a revaluation gain (ROCE, Asset turnover, OPM and gearing). Then another about which would increase after a rights issue, current ratio was the answer.

Hello...Did any one get question on profit adjustment in Section C? The question was on Profit adjustment and SOFP preparation.. In which it was told that some plant / equipment being ordered, already included in PPE and treated in payable. But has not been received even after year end.. Can u please suggest if anyone did how it has been treated?? And what shall be the profit for the year received after adjustment..

Sorry not PPE , included in plant...

Hey! I had the same doubt. I just subtracted the plant from plant and equipment and also subtracted it from payables. But then my balance sheet didn’t match in the end so I guess I was wrong.

I think we were supposed to remove it from plant and eqp and include it within payables?

I do, it would be current ratio I believe. The share issue would increase cash. The impairment question I selected no gain no loss too!

I did the same by deducting plant and add in payable..but not sure...

But didn't tally...

Hi guys, these are the questions I remember for A and B, in no particular order: 1. For two scenarios, identify if they need provision or contingent liability. 2. Choose correct ROCE and interest yield from a choice of two for each 3. Camping company, identity two correct facts about the effect of a year end change 4 Negative goodwill, whether (and how much) profit or loss there is in first year 5. Store and hold, scenario, when to recognise revenue 6. Which of four statements about diluted EPS is incorrect 7. What to include in as capitalised development in a scenario, either just the prototype or also some initial preparation for production, choice was therefore 250 or 350 8. Brands have zero capitalisable value 9. Calculate weighted average number of shares for an EPS scenario. 10. Diluted EPS, choose correct amount. 11. Goodwill, calculate a number 12. Revenue recognition process, put the relevant steps in the correct order. 13. No tax implications from a revaluation, goes to OCI. 14. Government grant for an intangible asset, which two statements are correct re how it gets accounted for. 15. Definition of asset and liability 16 Government assistance not being on financial statements, it would be included in notes. 17. Correct inventory valuation ie net realisable value or cost 18. Revenue allocation for first year, based on pro-rata’ing 490 in the proportion 350 to (75 *2) 19. Identify three correct characteristics from the framework 20. Parent having the right to appoint a director, example of significant influence 21. Policy change namely the method and of valuation of inventory, think this was about whether a restatement would be required, which a policy change would mean yes

My goodwill calculation was the same as you. Did you remove $12m of investment in Smiley from financial assets on consolidated SOFP?

for the first question on impairment of goodwill in a business combinations what were the answers please? I selected the first two one

Time is limited in this exam. Acca need to review its time limit for Financial Reporting exam because of the new CBE introductory. Do you guys agree? The paper includes too much date and months. This need time to think about these tricky question.

There was a ques on development expenditure in sec A. i think i put $ 350000 as answer. I capitalised the technical feasibilty and production of the process Was this the answer? Do you guys remember the ques?

Wow, photographic memory? or were you studying and answering?

I didn't know how to answer this. I put $250,000 as i thought that researching the feasibility for the production was P&L

DID ANY ONE GET THE GOODWILL AND CON. PROFIT AND LOSS ACCOUNT QST. IN WHICH WE HAVE GIVEN THE VALUE OF NET ASSETS AT THE DATE OF ACQ. OF SUBSIDIARY. AND OTHER ADDTIONAL WORKING OF F.V OF PLANT EXCEED THE VALUE OF C.V & INV AT THE DATE OF ACQ. BUT NOT ON THE DATE OF REP. DATE.?? I DID. IN GOODWILL CALULCATION. GIVEN ASSET AT THE DATE OF ACQ.+ F.V EXCESS OF PLANT - EXCESS DEP + EXCESS INV. VALUE(ASSUMING C.Y PROFIT OF PRE PERIOD 3 MONTHS INCLUDED IN THE GIVEN NET ASSETS) I HAVE CAL. REP DATE NET ASSET AS. GIVEN ACQ. NET ASSETS + F.V EXCESS - EXCESS DEP.+ C.Y 9 MONTHS PROFIT (ASSUMING 3 MONTHS PROFIT INCLUDED IN NET ASSET AT ACQ.) ??? DID I DO THE RIGHT CALCULATIONS??? I WAS LITTLE BIT CONFUSED IN THE DIVIDEND PART OF NCI. I DID RIGHT CALCULATION OF DIV. PART OF PARENT.

Yeah agree, the mark allocation seemed generous for the amount of work, no deferred tax,no goodwill impairment, nothing

Hey John I just wrote my exam on the 17 and after going through this poll I realised that our paper may have been the same one,even i had gotten profit attributable to NCI of 600,did the cost of investment consist of cash and deferred consideration and was the FV of NCI 2600(200 shares*13 share price)

Hey I had the same question and I was wondering why did u have to calculate net assets at the reporting date moreover why did you subtract excess depreciation at the reporting date wouldn't you just have to adjust it to fair value

Yeah, you are right, this calculation was useless , i was just in the flow ?

Did i do the right calculations of net asset of sub. At the date of acquisition.? Any idea.?

I don't think you were supposed to deduct the excess depreciation at the date of acquisition 9 months of the excess depriciation would be shown in the csopl, other, than the excess deperication my working for the FV of net assets at the date of acquisition is the same as yours,for me my consolidated profit for the year was something like 8820 with the profit being attributable to the NCI of 600 and to the parent 8220.

Did anyone get the ratios question with the disposal of wholly owned subsidiary, do you remember the answer

Omg??, how did i do the wrong calculation?, i have practiced alot in this, still i did the wrong, ?, you did it well bro, might be they will deduct 1-2 marks out of 5marks. Let’s see, hope for the best :)

Yes, i did get this question about ratio and disposal of subsidiary, What was your answer?