*** ACCA Paper SBR December 2018 Exam was.. Instant Poll and comments ***

Why ow why didn’t I sit P2 when I had the chance final exam and it will be touch and go wether I pass or not, wasn’t expecting so much conceptual framework, and q4bwas a disaster, 1 made a decent attempt at but doubt I got more than half the marks was not expecting 18 marks on cash flows. Q2 was pretty straight forward and first half of q3 for UK paper was aswell.

Well p2 was in the 50s normally but can’t see this one getting above 35% in line with the optional ones which would be a huge kick in the teeth

I quite liked the cashflow question, the only bit with numbers! Think i got 339 as my answer. Q2 and 3 were hard, i wasnt sure whether to talk about level 2 and 3 valuations of whether it should b future cashflows as leased for full uel. The tax part of q4 was awful, for all those marks, i genuinely thort they had put an advanced tax q in our paper by mistake.

After lease commencement, a lessee shall measure the right-of-use asset using a cost model, unless: [IFRS 16:29, 34, 35]

i) the right-of-use asset is an investment property and the lessee fair values its investment property under IAS 40; or

ii) the right-of-use asset relates to a class of PPE to which the lessee applies IAS 16’s revaluation model, in which case all right-of-use assets relating to that class of PPE can be revalued.

So should the investment property in Q2 be valued at fair value and not cost?

The SBR exam paper was not for students. It was bit of research works on Conceptual Framework, IASB’s EDs and Financial Reporting Standard. I felt it was for experienced financial reporting experts not for me :-(.

Anyhow, it was an opening of new question pattern for professional exam. I never met any of this kind of question set before in BPP, past exam papers etc.

No way to pass this time, what I wrote therein.

1. Cash flow: Did adjustment in operating expenses, calculated WC movement and drawn final balance.
2. Explained few silly points on each of the workings.
3. Ethics: Mentioned IAS40 can be used as lease to ensure rental earnings. But measurement of FV was not currect as non financial asset can be measured as their ‘highest and best use. Mentioned ethical issues but not at my satisfaction level-what I could write.
4. On DT only mentioned several definitions like tax computation, TAX base, DTaxLib, Temp Tax lib. Tried to say something on scenario.

In exam condition to attend such horrific set of questions was put myself down and frustrated. Now become confused about my ongoing preparation for this and other professional exams!

Also, it was technically a sale and leaseback transaction. I wrote something about them but not too much. Really struggled with time to write.

Overall, I’ve felt the exam was pretty unfair, to be honest.

Whilst you could possibly defend question 1, question 4 is absolutely indefensible. Was this really trial sat? And by whom?

I recall I read a few times that current issues were going to be tested less in SBR than P2. Not only is that not true in the slightest and they were featured just much, but the questions were basically knowledge based rather than principles based like in P2! And they were all compulsory for good measure.

I suspect the next few sessions will be just as hard if not harder, I’m afraid. ACCA clearly does not intend to make the qualification any easier than it was, and this is basically to offset the fact there are just 13 exams, not 14. The first paper could just have been a gift for the brave…

Also, P2 was a very challenging exam but you could feel it tested your accounting skills to the highest limit possible, and it was usually very fair (even though I marginally failed it). There was something prestigious about it. This one doesn’t feel like a real test of accounting skills but a weird exam which aspires to be practical and forward-looking but is it, really? Now, it is basically testing how many obscure areas of the syllabus you have covered, how lucky you are and how fast you can write.

Yes it was a daft exam in my opinion, way too much on IFRS etc, and realistically, who can remember all of them and the details in them? Moreover it’s not applicable to real life work, ive worked with some very small professionals who still need to look up a standard in order to treat a transaction in such a way, no one is expected to memorise them all ?
I read the comments from the September exam and they had a goodwill consol and cash flow question, this is what I’d expect. Today’s exam was all kings if wrong imo

I have a question for ACCA…

Under IFRS 15 Revenue from Contracts with customers (including students):
how should you account for examination fees that have been collected for a SBR examination that doesn’t faithfully represent the study material that you have approved?

If the performance obligation of producing a fair examination has not been fulfilled, should students be entitled to a refund?

If so, will you be reporting a significant reversal in the cumulative revenue you have recognised?

You are not the only one. I thought it was all about the investment property and the FV element and how it was going to affect the gearing ratio, as the £6m surplus would have gone to OCE part of the revaluation surplus account.

I assumed the $28m figure was included in the figures that were listed above, therefore if we reduced the Equity by $6m it would cause the gearing ratio to go past and beyond the 50% threshold, which in turn would make the bank loan repayable instantly.

I didn’t even catch the fact about it being a lease, because what bearing does a lease have on the gearing ratio? This has really got me.

Extremely disappointed with this SBR exam, no consolidation, no proper ifrs testing, was this more of a general paper? From where should we learn all these frameworks , they are not described in detail in revision kits, nor books.
To say the least, today’s exam was not at all the Business reporting exam.

@sr100 said:
You are not the only one. I thought it was all about the investment property and the FV element and how it was going to affect the gearing ratio, as the £6m surplus would have gone to OCE part of the revaluation surplus account.

I assumed the $28m figure was included in the figures that were listed above, therefore if we reduced the Equity by $6m it would cause the gearing ratio to go past and beyond the 50% threshold, which in turn would make the bank loan repayable instantly.

I didn’t even catch the fact about it being a lease, because what bearing does a lease have on the gearing ratio? This has really got me.

The lease comes into play because you can recognise an Investment property under IAS40 if it is leased for the majority of its useful life. Think it was thrown in to try and veer people off

@sr100 said:
But what affect would a lease have on the gearing ratio?

it wouldn’t. the valuation of 28m affected the ratio as it would have increased equity and reduced gearing. I just double checked on ifrs.org and actually think I am wrong about the long term lease. I think this would result in property being classified as owner occupied under IAS16…and not IAS40. wish I hadn’t looked!