*** P2 June 2015 Exam was.. Instant Poll and comments ***

Is it just me not good enough or is the paper is really tough?

Hi everybody,
During exam I realized that my preparation was bad:( A little late to think about it:)
Really broad syllabus!!

Was a tough paper – lots on FV and agriculture, question 4 was also a very odd one! God I hope I pass!!!

Cannt imagine how the hell examiner think of such tough questions.

Diary of a P2 Exam:

Question 1
It was a typical Balance Sheet question with two subs and one disposal. The group accounting was OK for me and did it within the time allocation.
Contingent consideration
Further consideration was payable if profit reached $4m but there was 20% chance of this. I ignored it as it was not probable.
NCI
There was a twist in the NCI. The value had to be calculated using the P/E ratio. The share capital was 13m. PAT was $3.6m. I got the EPS and used adjusted P/E ratio of 19 to get share price and then using that, calculated FV of NCI.
Lease
There was a lease question that I messed up. Something about leasing out assets and selling assets where a sale was recorded as $50 revenue and $40m COS ( reflected in Financial Lease receivable of $50m). Didn’t have a definite idea but tried taking it out of receivables and payables. ???
Pensions
Messed this up as well. Could not think straight so just made an assumption and moved on. The factory was being closed and employees were being made redundant. PV of obligation was 8 from 10 before. FV of asset plan was 7 before. Did not know what to do so assumed (8-7)=1 was net pension liability.
This included a cost of $6m which I assumed was provision.
Foreign Property
This was a typical foreign property with impairment.
Sub Disposal
Had to calculate good will and the profit/loss on disposal. We were given net assets at acqn of $44m and at disposal of $60m There was also an impairment of goodwill. It was partial g/w. One mistake I made is allocated this to the NCI when it is parent only when calculating NCI at y/e. Therefore got a loss on disposal instead of profit. How many marks lost?
Section b:
Can’t remember! But I gave as many points as there were marks for.
Section c:
This was about rules based standard vs principles based standard. I gave definition of accounting standard and explained both rules/principles based. Weak conclusion due to time strictness, had to move on but gave it a good go!.

Question 4

This was on SPLOCI, recycling and had integrated reporting.
a(i) Describe current presentation of SPLOCI (4marks)
I said it is a performance statement, two sections, P/L tries to classify operating performances (gave example), OCI has two sub sections- reclassified to P/l and not reclassified.
b(ii) Talk about reclassification with example and argue for and against (5 marks)
Explained how it occurs and used cash flow hedge as example. Argument for was it shows total effect of the transaction=more understandable to users, against: same gain recognised twice.
c(iii) principles and key components of IR and concerns (8 marks)
Just gave all I know! Concerns I gave as IT costs and staff costs.
b) Hedging gain was $3m in OCI. I calculated impairment loss as $2m and loss on transaction as $0.2m. Then explained why P/L would only be charged $0.8. (Thinking back my explanation should have stated recycling but didn’t!)
PPE impairment reversal was similar with impairment reversal from OCE and excess charged to P/L.

that was a hell of a paper, I am at my 4th sitting for P1 – am giving up…

I started you Q4 , I made it good but not excellent.
Then I did Q3 , it is fine
Finally I started in Q3 it was fine , I attempt one part A but the time wasnt with me I make all the working except for foreign exchange last point , I didnt complete the consolidated FS.
I wish to pass , this is the second time to attempt P2 .

No no don’t give up this is what they want us to do! You never know when u get lucky with these papers

A really tough paper. I’ve done mock papers and been able to most of them.

I calculated FV NCI was calculated using EPS which can be worked out earnings (3.6)/shares then PE = Market Value of shares/EPS. You use that to formulate the basis on NCI.

Nasty trick to put in.

Large part on agriculture which was predictable because it’s new to syllabus but horrible to deal with. Didn’t do this.

Q3 really worded very oddly in terms of the contracts particularly part c. Could quite get my head around what the examiner wanted.

Q4 was an odd one agreed but if you studied the technical articles should have been ok.

Overall one of the hardest I’ve seen.

Yes I agree with all the posts so far.
Q1 I thought it was very time consuming to work out, especially the NCI’s…. no textbooks covered these methods for calculating NCI.
It was a tough paper, with very long details on the questions, where there is a lot to digest, before attempting to answer.
Not sure about a pass….

I didn’t calculate EPS, i did like this:

P/E=19
hence earnings is given calculate total market capitalization

P/3.6 =19

P= 19×3.6
p=68.4

hence NCI will be 20%of 68.4
NCI = 13.68