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

The worst ACCA exam I’ve sat.. B questions were stupidly hard, the scenarios were way too complex and I ran out of time. This is the first ACCA exam where I have struggled with time management. It took about 15/20 mins to understand what was actually going on in the question. 25mark question was based on crypto assets (initial coin offerings), there is only one page of this in my revision kit…. Needed to discuss treatment of presale ICO agreements and reasons why tokens offered to directors for $50,000 cars should be an “employee benefit”… Looking forward to retake!

ditto I just ate 4 nutella sandwhiches –

how depressing is this …….

My remote exam failed when i was on my final question(q1)

Despite me praying and crossing everything the procter was also unable to get me back online – i think it was his first day somehow ( crying face – mine that is)

to top this bunch of crap off i have to sit this exam again on the 15th dec at 4:45am – someone must hate me ( another crying face)

anyone esle have technical issues???????

I’m delighted it’s not just me that felt the exam seemed more a test of your.mental stamina and time management than a test on your understanding of financial reporting principles.
I said it earlier and I’ll say it again. The fact that they needed a diagram in two of the questions to help you interpret what was going on in such bizarre and complicated scenarios says a lot. They really should not have signed off so many twisty scenarios making it into one exam paper.

Thanks guys for being here! It was a total disaster, I have studied so much, I went prepared and focused, at the end I am totally disappointed the exam was so different from what I was preparing for! I feel better that I am not he only one filling it.

Firstly it was a very difficult exam versus previous papers and study book examples. If you don’t understand the business or can relate to it then in exam situation it throws you off.

Even the cashflow statement – loads of previous examples of acquisitions and actually preparing a statement from the notes but this was totally different and harder in my opinion. Not absolutely fair in a time pressured situation I don’t think.

The ethics part in 2nd question was fairly simple. The forestry company was setting up for ESG when asking about important to investors of risks etc. Thats why they picked a ‘forestry’ company i.e. sustainability.

The crypto’s was confusing – cryptos are not financial assets so nothing to do with IFRS9 and don’t really have a standard – they are intangibles so that would imply IAS 38 but this was a crypto broker who holds tokens in normal course of business so surely this would be Inventories IAS2? (account as lower of cost and NRV in that case)

I thought the question on the deferred tax asset was also hard than normal as the business model of the company was confusing to understand before even getting to the question which for me killed time.

I found this on PwC article – identical near enough to question in exam..

Background
Real London enters into a loan agreement with Madrid United, whereby Yazenito, under contractual agreement with that club, would temporarily be transferred to Real London for a two-year period. There are no ‘call back’ options.
As part of the loan agreement, Real London agrees to:
? pay €100 to Madrid United, and
? take over responsibility to pay Yazenito’s wages, amounting to €200 per year for two years.
The loan agreement contains an unconditional obligation to transfer Yazenito at the end of the loan period permanently. The fee to be paid to the former club for the permanent transfer amounts to €500, payable at the end of the two-year loan period.
Management has determined that each of the components of the agreement are priced at market value.
How should management account for this transaction?

Accounting for Real London
In substance, the loan constitutes a permanent transfer, because there is an unconditional obligation to transfer at signature but there is a deferred payment arrangement (Framework para 4.6). There are no circumstances in which either club could elect to cancel on the arrangement.
It would then be appropriate to account for the transaction as a permanent transfer (see solution #1) from contract inception, when control of the registration rights has transferred to Real London.
Real London would capitalise the present value of the total payable (€100 + €500) and amortise it over the full player contract term.
If the components are not priced at market values, the total consideration would be assigned to each component (that is, in this case, to the consideration for purchase of the registration rights and to the employee benefit) on a relative stand-alone selling price basis.
Accounting for Madrid United
Similar to the above, and since the arrangement constitutes a permanent transfer, Madrid United should derecognise the intangible asset (player registration rights) when control transfers to Real London, resulting in a gain or loss on sale being recognised. The gain would be calculated based on the present value of €600.

I feel like it’s not a permanent transfer but more of a « on loan player – temporary transfer » no?
I said it was intangible asset but thinking back about the exam I guess it was a lease because there was already a question testing intangible asset for development costs and promotional costs. They use to test different ifrs in each question in each exam so for me it was a lease. Arrrggghhhh

i think the fact that as a group we still cant quite decide the answer, even after googling, shows how poor the exam was. These exams need to be clear cut demonstrations of learning the syllabus. ive discussed the questions with many of my fully qualified colleagues and even they struggle to know how to understand the questions and how to answer them.

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Hi all,
I had the same exam version with crypto as most of you. I have answered in following way:

Question 1
a) (i) Concerning the Fair Value, the difficulty relates that the sale subsidiary caused loss of control, which is not taken account in a market share price of subsidiary. In accordance with IFRS13 the Level 2 prices had to be used, which is observable for disposal of similar sized companies, which includes losing the control.

(ii) Calculation of the profit:
Net consideration: 35,000
FV of interest o retained interest: 1,000*5(market price)*0,8(FV of losing control)=4,000
Net asset: (45,000)
Goodwill: (3,600)
NCI using Fair value method (10,000*20%*5(it is not including the losing of control): 10,000
Profit: 400

(iii) CF Adjustment
CF from operations: 146.4
Working capital: deduct all working capital of subsidiary(IFRS10)
Contributions into Benefit plan (12)
Financial asset increase: (15) – this is not operating activity and it should be divided into:
(3) acquisition of the bond on reporting date- investing activity in minus and no interest in financing activities as acquired on reporting date
(1) acquisition of new financial asset- investing activity in minus
(6) increase in the value of associate and it is non-cash event. Therefore, no impact on CF and only dividend from associate for 1 should be recognized in investing in plus
(5) the deposit was made in April, hence investing activities in minus and interest to financing for half a year
The remaining adjustments were easy one

b) The dispute with supplier- that is typical question from AA/AAA exam, where the Company is obliged to adjust the FS after reporting date and before the publishing, if the subsequent is classified as adjusting event. The event occured in reporting year, hence it refers to that period.

Question 2

a) ethical issue relates to lack of professional behaviour and competence. FD also demonstrated the breach of integrity and objectivity(did not tell the holding that there a liquidity problems) in his judgement of FS and non-compliance with other laws. The going concern and law non-compliance is at risk. Moreover I have added few sentences about lack of knowledge about the hedge(lack of competence as qualified accountant)

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

In Kaplan Exam kit there was similar question with player contracts and football club. It would state the player contracts should be recognized as Intangibles Assets. However in this question i wrote that important to determine under IFRS 15 Revenue if the transfer was a sale. The hard part was that usually in exam questions the entity sales something and in this case there was a buyer…. I concluded it was not a sale as there is no obligatory of purchase a player after expiry of contract, therefore it should be treated as leasing under IFRS 16, where PV of liability(7,000(initial payment)+2,600 per year discunted by 5% should be ROU depreciated under 3 years. The initial payment should be included in calculation as transaction was at reporting date 31.12.2017 and contract starts on 1.01.2018. Therefore it should be recognized… I think I might be wrong…

c) the government grants as of 31.03.2017 and 31.03.2018:

Under IAS20 a government grant is recognised only when there is reasonable assurance that the entity will comply with any conditions attached to the grant and the grant will be received.

(i) Company received decision of obtaining the grant concerning the stadium in December 2016, however final condition was met in July 2017. Therefore grant should be recognized in 2018 as deduction from total costs or def income. As of 31.03.2017 there was not reasonably assurance and it should be not recognized as it is not virtually certain

(ii) Grant refers to cost incurred in March 2017 and was received in July 2017. I wrote that grant receivable as compensation for costs already incurred, should be recognised as income or retained earnings in 2018

(iii) I do not remember

Question 3

(a) There was a scheme under, which Lucid(forestry company) is financing it liqudity towards the supplier of trees via reverse factoring. The question was, whether liability towards the bank should be trade payables or debt. For me it was easy one as i have recently wrote FM and there are factors that indicates that is debt:
– the repayment period of the reverse factoring liability is significantly longer than the normal payment date. Lucid has 90 days to Bank and on invoice was 30 days
– interest is charged by the bank and interests were 7%

(b) Under IAS 12 Company can recognize DTA to the extent of that it would be used against a profit. Current law stated losses from prior year can be carried forward indefinitely, however the is possibility to change this to limit it to 3 years. As of the reporting date there was significant historical losses, potential tax law changes and no profit in near future Company cannot recognize DTA.

(c) question relates to the investors risk in face of Management estimation and judgements, so I described Conceptual Framework and IAS37.

Question 4

(a) Crypto asset disclosure requirements – Just wrote the faithful presentation and relevance of FS disclosure.

(b) Whether the development cost and promotional costs can be capitalised as intangible asset. The development of trading platform meets the requirements of IAS38 for capitalisation as it is providing economy benefit. The promotional costs should be expensed to PL

(c) I just wrote that the token can be treated as crowdfunding, where the profits are gained on % of transactions in the market by the Company. The investors [provided money to company for token, however in exhibit there were two times stated that it is not equity. Hence I treated is a liability and made following journals( DR Cash 1mln; CR Liability 1mln)(DR Cash 9mln; CR Liability 9mln)

(d)The program was an employee benefit rather than a share based payment, because it not includes equity instrument in a settlement of transaction(in point C it was also important that token was not equity instrument)

I must agree with you that questions in this exam were quite strange in comparison to prior exams… Also there was not many calculations to do.

Hope everyone will pass

Participants will have the opportunity to give feedback now as the emails requesting feedback from ACCA will be out soon.
I do think they heed the feedback, at least I hope they.
Leaving aside the unusual and confusing nature of the questions, a big issue for me was the time available to attempt 100 marks while also trying to untangle a riddle which is not at all realistic in any employment situation.

I hope we all pass

Yeh had the email for feedback earlier today. Gave my honest feedback but cant imagine it will help.