SBR*** December 2023 ACCA SBR exam – Instant Poll and comments ***

How did everyone feel about exam? Revenue ? impairements ?

It was my first acca exam . I was blank I forgot what I studied . And I made a mistake and choose cbe exam it was my first time I wasn't able to copy from exhibit after a hours found there was a option I should inable it I wasted time by typing it ?. Time management is the problem ?

Q1 30 marks correct the consolidated Cashflow after Sub acquisition. Q2 20 marks on Ethics and data confidentiality due to employees working from home. Q3 - Q4 was on bonds, Segment reporting, sale and lease back, revenue recognition, operating lease.

I got the same but q2 ethics was 12 and 8 points for segment reporting.

Personally hated the decision to allocate so many marks for niche topics in this exam. 25 marks on Sale and leaseback completely threw me off

Definitely my issue

I was disappointed from the exam. The topics like sale and lease back definitely didn't deserve so many marks. There wasn't question about different IFRS in which you could show combined knowledge. And like in my case I completely lost the marks from lease and lease back because was niche topic. Ethics question was okay I guess. In question 4 I expected to have more questions about investors and their view point but again disappointed. This wasn't anything like the mocks or BPP topics which was most observable in the revision kit. I was expecting also "hot topics" as cryptocurrencys or conceptual framework but again nothing. Disaster ACCA.

Couldn’t agree more. The whole of my first question was on cash flow statements. Question two and three were okay. But four was the worse. Never saw a 25 mark question on sale and lease backs coming. I was totally unprepared, no chance I have passed that exam. Very disappointed as I studied for months.

Q1 14 marks adjust the cashflow 10 marks explain the adjustments 6 marks explain the presentation of financial instruments, bank loan and overdraft in cashflow statement Q2 10 + 2 marks ethics 8 marks segment reporting Q3 8 marks credit impaired financial asset ?? Marks Revenue recognition ?? Foreign exchange in individual and consolidated financial statements Q4 9 marks sale and leaseback explanations 7 marks sale and leaseback scenario 7 + 2 marks sale and leaseback compare the options, impact on financial statements and KPIs

My question 1 was on Preparation of Statement of Financial position with FV adjustments and IAS 19 Employee Benefits. Q2. Ethics Question- Accounting and Ethical Implications. Q3. Question around IFRS 5 Non Current Assets held forsale - Disposal group. Q4. Impact of Climate Change on the FS- Investor Focus.

In question 1, Do I need to adjust the value of the intangible assets of the acquiree (not the PPE) for net assets calculation? I didn't adjust that because I thought the price for which is expected to sell to competitor is not really reliable and the acquirer not intending to sell the intangible asset after acquisition consolidate my opinion. Not really sure.

I adjusted it by 0.6 (I think BV was 3 and FV was 3.6). They probably do not intend to use it and they won't sell it either, my understanding is that there needs to be FV of an item in GW calculation thus I made an adjustment and recognized 0.6 in Intangible Assets on top. But definitely I made a mistake with derecognition of 10% investment - I recognized the gain in RE and I think it should be OCE as this was FVTOCI investment. Can you confirm if except for Q1 you made any calculations in the rest of your exam? I used spreadsheet in Q1 only and the rest was I believe purely 'discuss or explain' questions. But that exam was so tricky so I started questioning myself if I understood what I have been asked for :)

Yes, calculation is required in question 1 only. Lol I though too much on question 1, My mind was that the information about the price of patent is tricky and I should not adjust for that because the fair value reflects the price that would be received to sell an asset or paid to settle a liability "between market participants" in an orderly transaction at measurement date. This is not between market participants as the potential buyer is the competitor and the acquirer does not intend to sell it as well, so that the price would be unfair value. Hope to pass at 50%.

I spent also a bit too much time on Q1. Maybe you are right with that FV! I do not really remember all the questions from the exam - so about such details I forgot once I moved to next question.

A lot of the exam seemed to be on topics that only made up one page of the textbook with no mention of the key topics I'd focused on :( I found the sale and leaseback question really hard to give enough information to get 25 marks, and to be honest the only question I feel certain went well was the 12 marks on ethics. May have picked up a few marks but don't think it'll be anywhere near enough. I guess there's always next time!

So do I. Next time I should multiply 1.8 by number of marks each question offers to deal with the exam time pressure better.

Fair value is defined from market perspective, it doesn't matter how the owner is planning to use the asset. If someone from the market is prepared to pay more for it, then this should be the FV. So I think it had to be adjusted. Please check question Columbia if you have the kit. I think the situation there is similar and they adjust for it. In regards to the 10% initial equity holding, I adjusted for it in OCE, not in RE. I think it should be revalued first to FV as it's held through FVOCI and then disposed. What do you think is the correct approach?

you are correct Mariya2311, in both 10% initial equity holding and net assets circumstances. In studyhub, it does requires previously hold equity shares to be revalued and the difference will be recognized in OCI if it was measured at FVTOCI before the date control is obtained.

@Maria2311 - I agree - I think it should be OCE (I made it to RE and I also recycled only the difference between current value and FV (so I did not include the change from the moment when they purchased 10%). What other adjustments you made in spreadsheet? GW, NCI, NCAHFS, IA, RE, OCE? Anything else?

Hello, how come am I reading people saying "I got this kind of questions" are there different version of the exam that you can get? Also I don't recall seeing patents in the Cashflows question in Q1? The only adjustments I thought to make were impairments on goodwill, working capital, and tax, then PPE and acquisition of S in investing activities?

Paula, I adjusted for what you said, also I removed the equity of the subsidiary as it was added. For the PPE it was said that it wasn't classified as held for sale at the reporting date. Even if it met the criteria, if it wasn't classified as held for sale, it cannot be adjusted back. So I added it as FV of 18.4 (I think). Carrying amount after depreciation for 3 years was 18.5. So I included adjustment at acquisition for -0.1. Then afterwards I recognized impairment loss for the cost of sale of 0.2. I assumed it had to be impaired because it was sold much below its carrying amount (impariment indicator). Also, I removed the building that was paid as consideration for the new 60%

Hi @Maria2311, was this the international version of the paper?

Yes, there are 2 or maybe 3 versions of each exam. It's not the same for everyone.

You had to remeasure the property to FV less cost to sell and it should be presented as HFS for YE (it was sold after the year end closing). 0.3 was the diff between CA and FVLCTS. It met HFS criteria before YEC so i think it should be adjusted. Also since another property was used as a consideration for 60% it should still be consolidated in group SOFP.

can you confirm if the property is the one and only consideration for 60% equity shares? And if you still consolidated the property, what would be the credit entry for that to balance the goodwill entries?

For 60% yes - I put 35m consideration as highest and best use (but i did did not make adj in ppe for that). On top of that you had to include fv of 10% of investment they had.

I mean if the consideration is 35m, it would be included in goodwill calculation and increase the goodwill. Right? and the entries would normally be: Dr Goodwill Dr FV adjustment ( in case net assets of acquiree increases in FV) Dr share capital, pre-acquisition retained earnings of acquiree Cr NCI Cr consideration (the amount of investment in acquiree) So if we dont credit PPE, it must be credit entry elsewhere? I guess.

I also thought at first that I should keep the PPE. But then I realized that the building was given to the old shareholders in exchange for their 60%. So I assumed that they took it and left, it wasn't like sale to the subsidiary. Also, as @phunguyen290699 said, the balance wasn't balancing if I don't remove it. Did your assets=liability+equity at the end?

Firstly, I adjust the fair value of 35m of the PPE by the entry (Dr PPE, Cr RE ), then I do the goodwill entry as normal. But suddenly my assets do not equal liabilties + equity by the amount of the PPE adjustment. Due to time pressure, I decided to equalize that by balancing method and move on to the next question.

But If I remember correctly, they chose to keep using the asset. Hence, I guess that the value of discontinuation was not valid as it was physically impossible despite the higher value.