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

Looking at the question paper again I don’t think I’ve reached the 50 mark.

In the P2 papers q1 was mostly numbers. I understand ACCA wanting student to do more application of knowledge rather than just number but I think it’s unreasonable to make students do mostly written answers and making it mandatory to do 4 written questions rather than just 2 questions previously. It’s very difficult to plan and write your answers for each question in such little time.

I also prepared using the past exam questions on P2, the two specimen papers, the September paper and my ACCA approved question bank/study material. I felt well prepared that I had covered and understood a great deal of the topics but this exam has taught me that no matter what I covered it just wasn’t enough.

Q1 the group cash flow was ok not too hard, wish I can score a pass mark
However I think I’m wrong about the HFS classification, where the Watson can’t be HSF as it is not available for sale at present condition because of the SBP
Q2 the only challenging bit is the ifrs 16 and ias 40, in my opinion I think it’s a finance lease as the majority of risk and reward has transferred to the lessee(40 years) so can’t an investment property ,therefore overstate the profit and asset and therefore understate the gearing to protect the loan
The revenue bit was easiest one
Q3 A in analysing the NRV of different coal , I said the things related to ifrs 13 fvm ,and talked through it , don’t think it would be good
B easy
C no control here as 52%less then 72% , and I used the control criterias to talk it through, and concluded that joint venture.
Q4 management commentary , I read the articles , and I found the same qn in Kaplan kit
Tax , i only talked the things that I known
Such as the changes in tax rate is a change in accounting estimate
Deferred tax assets criterias
Deferred tax liability criterias
If anyone agree with me

@wangbaichuan said:
Q1 the group cash flow was ok not too hard, wish I can score a pass mark
However I think I’m wrong about the HFS classification, where the Watson can’t be HSF as it is not available for sale at present condition because of the SBP
Q2 the only challenging bit is the ifrs 16 and ias 40, in my opinion I think it’s a finance lease as the majority of risk and reward has transferred to the lessee(40 years) so can’t an investment property ,therefore overstate the profit and asset and therefore understate the gearing to protect the loan
The revenue bit was easiest one
Q3 A in analysing the NRV of different coal , I said the things related to ifrs 13 fvm ,and talked through it , don’t think it would be good
B easy
C no control here as 52%less then 72% , and I used the control criterias to talk it through, and concluded that joint venture.
Q4 management commentary , I read the articles , and I found the same qn in Kaplan kit
Tax , i only talked the things that I known
Such as the changes in tax rate is a change in accounting estimate
Deferred tax assets criterias
Deferred tax liability criterias
If anyone agree with me

Sounds like you are pretty accurate and the same as me on a lot of points. Just on the Control – I stated that as agreement was needed by 72% of the controlling interest, the other parties would not be able to take control as they would only represent 48% on acquisition of the additional 24%. I stated previously it was a joint arrangement under IFRS11 and that it now constitues control under IFRS10 – but I may be wrong, but I think so long as you list out the reasons why and show that you understand, and have studied the standards – you can grab some low hanging fruit. Best of luck!

It was unnecessarily difficult. The exam was deliberately tricky. The intention of the examiner was clearly not to test the knowledge but the be really mean and unfair.
Also impossible to finish it on time for 2 reasons, I had to read the questions multiple times because they were not comprehensible and the fact that we still have to write with hands in 2018 is really ridiculous. My hand was cramping after 2 hours, I couldn’t read my own writing from the last hour…
I invested so much time in this one, not worth it…

@kbourne said:

Hi guys. think we are all in the same boat here unfortunately. Very hard paper and lots of curveballs. Q4 was a killer. can anyone please advise on how the fair value of the coal would have been accounted for? I talked about fair values level 1 2 and 3 but wasn’t sure if I am honest. Could they have met the criteria of a Derivitive? HORRID paper

I said the NRV should be calculated by taking the spot rates and future rates as being level 1 and level 2 valuations and derivatives should be used in order to protect the fall in value for the future transactions.
Not sure is correct but this is how I answered.

This was my thoughts too.
However, I said since it is financial lease, the revaluation reserve would not be included in the equity and thus resulting in a higher gearing.

@jamioio said:
IFRS 16 Leases states that a lease is probably a finance lease if one or more of the following apply:
1) The lease term (including any secondary periods) is for the major part of the asset’s economic life
2) At the inception of the lease, the present value of the lease payments amounts to at least substantially all of the fair value of the leased asset

Both of these were found within the scenario text.

The property could therefore be de-recognised as an asset, and re-recognised as a receivable discounted to present value.

The discounting will lower the value of non-current assets and push gearing over the allowed limit. Further, the receivable is broken into non-current and current, again affecting the gearing ratio.

I think this question is open to interpretation, perhaps the examiner will just want to see your point, and that it is well explained. I certainly appreciate the argument with regards to level 1 and 2 inputs.

Personally, I found the IFRS 13 Fair Values element to be more useful in the ethical issues part of the question.

Hi all

Anyone wrote the answer in q3 a (1), conceptual framework affects valuation on inventory as re-introduce prudence concept? Not to overstate asset at the year end as value of inventory has a great deal of uncertainty about coal prices? Not sure if I can get any points for trying answer in this approach.

Also just done the ACCA student surveys with feedback as it is a very difficult paper, not within the scope of learning Criteria.

Kindly all put your feedback on Acca student survey if you want to get across your message to Acca about this exam difficulty and the lack of knowledge in books about what was examined.

I think the standard that applied in that question was IAS 40 investment property and not leases. Since the property was being kept for rentals, it can be rightly classified as an investment property.

It was all about framework… no consolidation, no major standards…. i am disappointed…

I don’t think there would of been a provision needed, there is no legal or constructive obligation as the reconditioning costs could of been avoided. Provisions are recognised if there’s uncertain timing which there’s not. I think the costs would of been capitalised and depreciated over the 2 years useful life until the next reconditioning. I’m not sure whether this would include the labour element though.

I am still in shock over this exam.

I thought I extremely well prepared. I attended all of the classes, studied the exam kit, completed all the mocks, reviewed the Specimen papers and this exam was nothing like what I expected.

Yes, I thought the cash flows question was fair but the rest of it was alien to me. I have passed every exam first time and this would have been my final exam.

I am really upset about this, it was as if I turned up and received the wrong paper.

I am preparing myself for resitting in March but if this is how the exams are going to be, I am not convinced I am ever going to pass.

Does anyone know if they scale the marks?
How soon is the paper uploaded to the ACCA website?

I will certainly be writing a complaint. I just hope everyone else does too so they can understand that this paper really was unfair.

Worst exam I’ve ever sat. Absolutely gutted. Complaint email has been sent.