*** December 2021 ACCA SBR exam – Instant Poll and comments ***

For me was complete disaster. I wrote the exam this afternoon, did anyone write in the morning and had different questions?

Question 1 was okay except the Statement of CF preparation, did not really understand what adjustmens they were expecting to see. I had the impression the accountant reclassed all investing activities as operating. Unfortunately the CF question had the most marks allocated.

Question 2 was not similar to any question in study quit or past exams. We had to discuss general topics, why not hedge accounting, new regulations implemented etc but was not really clear where is the ethical problem from my point view.
The second part about the leased player I was not sure if it’s a lease or should be recognised as PPE.

Question 3, about a forestry company. They allocated for the deferred tax asset part a lot of marks, I did not really understand why and what should be discussed for soo many marks.

Question 4 was about cryptocurrencies. Honestly speaking my English was not good enough to understand it correctly therefore I think I messed it up.

I studies soo much and in the end was a complete disaster don’t understand why they didn’t make this exam similar to the published past exams.

I had same qestions.

Qestion 1 i think i well done
Qestion 2 only “C” part done

Question 3 i answered deffered tax assets recognise in the statement if there is probability to receive tax profit in the future. According scenario entity changes its jurisdiction which allows use tax losses only for 3 year period. Then entity must regnise its deferred tax assets only on 4 reporting period (after 3 years, because there is budget for 6 years). Effective tax rate must be used as it represents any future changes in the tax rate.

Question 4 I answered that all cryptocurrency is a financial assets through profit or loss. Development cost is operational cost and must be included in the statement of profit or loss in one time at the reporting period then such costs were be.

this is it(((

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It was a crazy paper with time management big issue

I never comment after exams to criticise the efforts of the team setting them but I thought it was extremely disappointing to see that question on the forestry company and whether the bank relationship with the supplier was a debt or payable I think it was. They even had to provide a diagram for it such was the absolutely unnecessary complexity of the situation. That was just downright disappointing. Everything else was fair and square difficult and I concede that but they really should take note of such ridiculous scenarios and not put them into the exam.
Anyone else get that part of the question and can comment on the specifics?
I wasted 15 mins reading it and writing it out to interpret it before I realised it was likely a time trap hurdle. Then became angry and distracted which is not what ACCA should be setting out to do to participants.

Again the majority of it was fair and square difficult but that left a bad taste.

Also got the one about crypto and whether it is employee benefits rather than share based payments.
Tough paper.

What a complete mess of a paper. An entire question based around cryptocurrency which does even have an accounting standard, what a joke.

The football question I wrote a bit about leases but to be honest I think that’s wrong as humans aren’t assets? And the scheme about giving cars to directors… bizarre. I may have picked up valuable marks discussing ethics, deferred tax and management disclosures but I’ll be floored if it is enough to pass the entire paper.

There were just too many out of this world scenarios and I fail to believe how we are expected to link them back to what’s taught in the syllabus.

1D was about IAS 37 Provision as i wrote. Conflict with supplier who will pay for damage a nd how to treat this event.

irishproduce wrote:Actually that question about paying the directors of the crypto company in 5000 crypto tokens if they stayed for 2 years with the company. At the end of the 2 years, the tokens could be swapped for a car capped at 50k dollars.

directors recieved tokens and then tokens can be exchanged either a car which costs <$50 000 or $50 000 in cash

There isn’t Share-based payment because tokens aren’t shares. Equity share is share in net assets (assets minus liabilities).

I think it so

Hi best of luck.
Do u remember the last paragraph in the exhibit with cash flow? Did it also pertain to the financial asset?

I just came home and ate a whole packet of Tunnock’s Chocolate bars. This exam was horrible, I actually think my brain stopped working half-way through. Doing the mental marking if I pass it will a be a miracle but I am already thinking about a resit 🙁

Q1
(a) Difficulties in the application of FV estimate to Frogget Co
I wrote, the definition of fair value, and mentioned the ideal estimate uses level 1 inputs and market based approach, however only level 2 inputs in the share prices of similar sized entities are avaialbe. Concluded with the cashflow method being unsuitable due to Froggets poor performance.

(ii) Group profit on Disposal – not too challenging; Cash proceeds $35mil add: retianed investment in Froget $5mil less subsidary (FV $45mil, goodwill ($6mil less 60% imparement = -$2.4mil); Non controlling interest -$8.4mil) – not sure about this one, i think i got $5.8mil.

(b) Consolidated cashflow statement and commentaries
Identified the non-cash adjustments – depreciation, loss on disposal of PPE. Also stated that any cashflows for PPE should go in the investing section.

Reversal of $35million poreeds from sale – investing cashflow.

Working capital – nightmare, this really where I messed up and got seriously confused, i knew needed to apply the rule 2 of IAS 7 – remvoving assets and liabilites of the sub on disposal from the closing balances – adding to the closing movements less the subsidary’s recievables and inventory.**

**Anyone who answered this one confidently please share how you did it – I wasted so much time on this one 🙁

Ignored the financial instruement – actually, no I added it in the cashflow reconciliation, said it was in the wrong location so not part of operating cashflows

(c) The dispute with supplier – I’m guessing this was an event after reporting period, which I said should be adjusted if the amount had material significance, otherwise the note is suffiient – felt really dodgy this one!

Q2 – Ethics
Non-compliance with the profitability and sustainability report – I said the directors action indicated professional incompotence; tried to make the arguement that reporting goes beyond just the IFRS standards and users of the statements also require other forms of information to make informed decision. Also said the profitability reporting would in fact be useful to help management to properly manage the resources and stop things like over investing in players etc.

Ethical implications of hedging instrument – tied this to proffessional compotence again, the need to consult external expert on the hedging policy of the club, clearly not doing so had contributed to losses.

Ethical implication on the assumption of going concern – I said it was possible the director was losing objectivity (over optimistic) in light of the club’s agenda to raise itself up into higher division, it may be the case that he unable to consider the current sitation objectivly and should consult external 3rd party e.g. auditors to see if approriate conclusion to draw.

(b) The accounting treatment for FC Gate Co for the transaction over 3 years:

I went with IFRS 16 – Leases, as the lessor FC Gate needed to recognise right of use asset and lease liaiblity, and discounted the liaiblity to present value using 5% discount rate over 3 years – recorded as $16.63mil; right of asset ($16.63mil + 7.0mil for wages – probably really wrong). For the one-off bonus just expensed through profit and loss when its incurred.

c) the governemtn payment – Ignored was running out of time

Q3. After this point complete mess – Defered Tax question under UK-Variant so asking for difference with FRS 102 – which hadnt prepared for. Lucky if I get 2 marks for the nonsense I wrote.

Q4. The final question I didnt even attempt.

Basically only answered half the paper! **weirdly very theraputic writing this.

This is the first time I comment and I just want to say I’m extremely disappointed.
The scenarios were way too many, worded in an overly complex way that made time management just impossible.

In one of the scenario I had raw cotton in exchange of shares and whether or not it as under IFRS 9 or IFRS 2. I mean when does something like this actually happens? Was it necessary to add a 3 mark question with another scenario?

In the examiner reports they complain about students not getting in depth of the discussion, but realistically where is the time?
It takes time to decode the scenarios, understand the rule, state, apply, explain… all of it in 3 hours?
I had around 12 scenarios (3 per question) to understand and at least 8 IFRS standards.

Anyways good luck to you all!