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For the pension q – increase in salary and decrease of people leaviNg both mean that the pension libialoty will become more did anyone else right that?
And the cash flow pension w I said the re measurement won’t effect cash flow only the payment of 2m:
Only the contribution and benefit paid will affect cash flow I think was all I could scrape for the question
Think you are correct on the revenue question, I did similar.
I can’t remember what I for the cash consideration but I was confident enough that my workings were good on that.
For the last question on employee benefits, I had very little time left but completely blanked on that. I said it should be kept at pv of the liability taking the %of employees leaving into account and unwound into the pl over the 5 years. How did people answer that?
for this I did
DR: Cash 8.5
CR liability 8.5Then added the finance charge to increase the liability over 2 years so it ended as 9.55 before being transferred to the customer.
DR liability 9.55
CR Revenue 9.55Cashflow question threw me completely, i’d be lucky if i i get 5 marks for it. Overall tricky questions with not enough time to answer, it will be a resit for me i guess
Ya I did regarding the pension. Did you unwind it over the 5 years?
Fo the cashflows statement, because the actual payment was after year end for the pension, I said it should be added back into the cashflows statement as a payable should have been booked. Unsure on it thought
I used T accounts to solve the cashflows. Pluck in debit and credit. B/f and c/f. Then, balancing figure is the one added or deducted from cashflows.
The first question was split into 1) step acquisition 2) cash flows from investing and financing activities and 3) defined benefit obligation/pension and the impact it will have on cash flows.
First part was fine, got a cash paid figure of $5 or 3mn, cant remeber by working backward from goodwill. Anyone else got the same figure?
The second part was a nightmare. Spent so much time on the first part was rushing the second part. Skipped the qs with the intention of coming back to it later but didnt have the time.
Last part was a simple expanation of the impact on defined benefit obl on cashflows.
2nd qs – 20 marks – relatively easy. Got slightly confused with the recognition – decided it was at a point in time (2yrs from then) so cant recognise anything until then. Borrowing costs can be capitalised for qualifying assets etc if certain conditions are met.
Ethics – simple – apply the 5 codes
3rd qs – OK-ish regurgitating intangibles knoweldge. First qs was generic – discussing why its hard to recognise intangibles – active markets, costs measurements, seperability etc Focused on FRS102 and intangibles.
Remember one was about assets held for sale so regurgitated under FRS discontinued ops are shown in more detail etc vs IFRS and continue to be depreciated
One of the eprfumes can be recognised on the acquisition, the other brand cant (Clara) – estimates must be made of useful life
Last qs was a load of crap – SME’s skiped this chapter in my revision. Managed to blag a little bit about integrated reporting and the rmeasurement component part.
All in all, way too little time for these papers. 3 hrs is just not enough.
I got a cash figure of 4 when it balanced, with a profit on revaluation of the previously held interest of 0.4.
This includes the upwards revaluation of land at 0.6 added to the NA of the sub.
For the shares, I calculated as 1500 shares multiplied by the mv per share at day of acquisition, then added the fv of associate at date of acquisition and nci to get the total consideration before cash.
Then adjusted the fvna for land.
Then worked backwards to get the cash figure. Have a blank now as to what figure I got thought.For the cash flows question, my 5 workings were PPE, Investment in Associate, Investment Income, NCI and Intangible Assets. Then just got the b/f and c/f figures from the SOFP and added all the figures in from the SOPL and also the dialogue of the question. Then the balancing figures were cash inflows or outfows.
Then the acquisition of the sub was the answer for cash paid from question 1 minus the cash the subsidiary held already.
There was also an increase in share capital of 3000 (cash inflow)
Sale of the investment asset (4500 outflow)
Purchase of associate (5000 outflow)
Anyone else with similar workings?
I said that revenue would be recognised overtime and that $8.5 was incorrectly recorded in revenue.
I discounted the 9.55 back to PV and dr bank and credited deferred income.
Q1 was a disaster and completely caught me off guard. I don’t I’ve ever seen a CF question where I had to calculate from investing and financing activities. If I get 4/5 I’d be lucky.
I thought the rest of the paper was ok. No hidden standards where you had to try and figure out which standard they asked.
Was surprised that ethics question was 12 marks (10+2 for relating to scenario).
6 stores I said met HFS but the remaining didn’t as they didn’t meet the criteria set it under IFRS 5.
SMEs was surprising also and glad I revised that last night before exam just said it’s not based on size but accountability and then took IAS 38/IFRS 8/IAS 34 and compared IFRS’s for SME’s to IFRS full standards.
Integrated reporting is always a hot topic and APMs in relation to investor decisions so I just yapped on about those but not sure if it’s what they wanted.
I said the current service cost should hit the P&L but the my calc was rubbish! It asked if the 3% increase was above what they predicted and I mentioned the asset plan would hit the asset ceiling and there would surplus and they’d have to think about their recoverability but that could be pure rubbish ahaha and the decrease in probability would increase the pension liability and they’d have to put more money into the fund also.
Not sure but if I do pass it’ll be from Q2-4 and nothing to do with Q1.
I’m seriously annoyed with the ACCA over this exam. However I didn’t feel it was a disaster, it was just very bloody difficult. My main issue is that all the talk in the run up to the exam was about this being a discursive exam requiring us to read around the subject, with far more marks for the discussion than any calculations.
So what do the ACCA do? They throw in a SIXTEEN mark question all on calculations with “No discussion required”.
MAKE YOUR BLOODY MIND UP, ACCA!
I’ll be lucky if I got 6 out of the 16 there.
The SME topic threw me as well, glad I’m not the only one. Overall I reckon I failed this, probably with a score in the low to mid 30s.
There is no chance to complete such exam in the time given. Question one worth 30 marks was more than disaster. Revised for this exam since 6 months and I have no doubt I failed it. Unfortunately I think that ACCA is not about qualification and etc, it is all about money! It is done in the way that there is not enough time to ensure that most of the people will fail and pay for another exam. And this is not only my opinion, everybody says so :/
1st question
:sold associate and purchased sub
And backward calculation for cash consideration from goodwill
Calculate balance figure for ppe intangible financial asset equity and associate..
Db – mislead the user as this would add it back so showing cash is in entity …
Dont know what i done..
2nd
Revenue recognised over period /discount should be applied + unwind (but i use 8.5 and thinking now 9.5 should be used..)
And captialised under borrowing cost
Self interest professional competence …etc for ethic
3rd
Intangible : No active market difficult to identify..seperately…
acquistion of ??- should be separately account from goodwill…
Clara not indefinite life other indefinte..
Not held for sale as difficult to find active buyer even if it met requirement.. not highly probable maybe…dont know why i wrote this…
Dont know internet something..
4th
Sme is okay to compare full ifrs
No idea about information
No idea about calculation for db
Increase liabiliy due to salary and logevity risk and entity should bear.. even if it does not have sufficient asset in the plan
..”……
I will prepare next exam for SBR…….
hate defined benefit… hope i just got 50%…The benefit paid will not affect cash flow because it is not a cash flow from the entity but from the pension company. The remeasurement will not affect cash flow. The net interest component and the service cost will need to be added back as it decreased the operating profits.
The paper was overall okayish for me
Q1) i got 3m cash and the res 9m shares had to work backward by adding the revalued net assets and all
B)it totally threw me off i just did t accounts and the balancing figures i got i put em in the investing and financing was just the increase in shares and premium
C) i said service and interest cost need to be added back thus will increase the cash generated from operating activities since cotribution had not been paid.Q2) control was passed at the end so deffered income to be recorded now and revenue at the end of 2nd yesr and borrowing cost to be capitalized
B) i just calculted the pv of 9.5m and wrote the entries but opposite entries by mistake(ik such a dumb mistake to be loosing marks) i credited the cash and debited the deffered income plus the borrowing cost which needed to be capitalized :/
C) was okayish the accountant is looking to secure a permanent job so self interest
And not having skills but going to provide service professional behaviour not in compliance and should take legal advice if in violation of local regulations3) first part was theory
No active market
Hard to comapre with other brands due to being brands of such nature
B) i wrote a mixture of ias 38 provions for restructuring and ifrs 5 (it wasnt saleable in its current condition so not meeting the ifrs 5 criteria)
ii)first brand can be recognized as its well established
Second brand can not as once the actor goes poof the brand will too so definite life
iii) internet sales to be recorded seperately as theyre a different cash generating unit not working anyhow in relation with that specific store
4) luckily i read one question about ifrs for smes so just stated that its made for smes so they can apply those critiera and dont need the heavy disclorues and all which the public entities do and just gave example for no revaluation for certain assets in sme ifrs and all intagibles to be anortized over 10 years if uncertain usefull life
B) it will help investors to make decisions based on those ifrs for smes since if not followed management can be biased to show optimistic position and investors won’t have enough confidence without smes following a certain framework
C) just rubbish about how the intellcual human and natural capital will help them to create value can be reported in IR and how other relevant information which some investors look for will be available to those investors and will help the entity to follow a reporting layout so can be comapred this boosts shareholders confidence
B) almost blank (left for the end) just pv of the increase due to the salary didnt even have time to think about calculating the probability too ?
C) both will increase the pension cost as more employees will stay in employment and if salaries increase then higher future value thus more cost
I just hope i pass this attempt can’t even think about re studying and taking the exam pressure again wish me luckYeah same as me I believe.
As at the start I was increasing cash and also increasing the liability (deferred income) by 8.5.
Then unwound so by the end the liability of deferred income was 9.55 due to the finance costs over 2 years and then got debited and then revenue credited 9.55 when control passed to the customer.
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