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Q1 was a good one, but unfortunately left it for last yet it was the easiest of the lot..
the Associate was consolidated for half year, so just add 50% of that years P/L figures..
then had an amount for Share of Associate for the half year it was no longer a Subsidiary..the Impairment i thought i got right, but i did not in the end, add the current year earnings, so stuffed it up..
the Giles parts seemed like its increase in value that was due to equity asset at FVTOCI meant that the 20% portion of Assoc (for Field) of this part wold go to Fields OCI as Share of Giles, while the rest of the Giles increase in value would be netted off with the dividend paid out to give the P/L Share of Giles to Field.. i thought i got it right.. sure hope so..
the FX part.. thought it was as simple as the 20mill (?) kroner which were bought at purchase date to be paid some time later, silply had to be revalued on the SOFP figure at year end, and the difference went to the P/L but not sure if i put it in OCI… however i later thought its supposed to simply go to SOCIETY… so got some of it right and potentially a part wrong..
the share options… i got a figure of about 2.4 mill expense for that first year versus the 12mill that they had already included, so had to then do a correction on the consol for that.. i seemed to get it all right, but not sure if the 2.4mill figure was correct in the end.. i think it was like 21k-3k=18k by 200 options by $2 (?) at fair value.. gives about $7.2mill worth, But it was over 3 years, so then got the 2.4 mill.. hope it was right..
the PPE to IP reval i remembered that all IP reclassification goes to P/L except for PPE to IP reclassification revalue… that goes to Reval Reserve (if positive), then all else to P/L so i had the first reval to Reval and then second revaluation while it was already IP going to P/L… i think that the parent already had 4mill in reval of asset in the oci so it didnt need to be included there.. hope i got it right 🙂
then there was the deemed disposal on the assoc that became a subsidiary.. i hope i got that right.. haha..
1b was ok.. i think that the potential cash transaction would do nothing to Field, but if the loan was converted to shares as it was the more profitable for holders, then Field would go from 25% of 20mill shares giving 5mill holding to 5mill into 32mill (with the extra 12 mill shares) so their interest would go down to about 15.6% and potential interest in Equity versus Assoc..
i then blabbed on about how this would not in itself mean that Field drops it as an Assoc, cos if the bond holders were very wide so that there was no real extra influence from the 12 mill new shares, that it was possilble for Field to remain with Significant influence etc..
was running out of time, so then quickly listed a few bits of what significant influence was.1c seemed like a lot of marks for simple stuff.. cos the FD cannot offset PPE impairment against revenue… its not IAS/IFRS compliant.. then mentioned that his manner of stiffing the employees by doing that was not good for the co. due to low morale etc.. then added the classic statement.. Ethical behaviour is of paramount importance blabla and the FD should do it all fair and transparent etc… was running out of time… couldve done better.. after the exam i recalled that i should have added that the FD is probably a qualified accountant and therefore tied to the professions ethical codes etc…and delved a bit into it… on top of which i should have stated that dropping prices in PPR are not in themself an indication of impairment, but if the drop in the prices is more than what was expected, that that would then be an indicator for impairment….
anyway, i think that for the entire exam i might end up with a few short of 50%.. still hoping for the pass, but i think that i missed a great opportunity to nail it with such a straight forward Q1..
Q2 and Q3; not sure how this went.. somewhere between ok to disaster.. haha
i capitalised the 5yr overhaul on the PPE but potentially its not capitalisable;
the deferred tax asset seemed strange for so much marks for such an obvious thing… i ended up saying that they should write it off or at least a substantial portion of it.. then after exam realised that it was 19milll netted off 3mill DFLiability, and that perhaps they should not have done it, cos the Liab part was for temp differences but the 19mill part for past losses on co. operations… i think that i lost some gimme marks again !!!
the licensing item i stated was a Finance Lease type arrangement, but that the lack of conclusion for economic benefit made it difficult at first for it to be included as an asset.. but they paid the full FV price and then % of future rev.. and it was effectively a specialised asset etcetc.. had confusing bits, but i think i may have got it in the end..
the part about the 65% in speecial vehicle, i said that substance of transaction means that the co. should capitalise on own books their part of the asset and the ongoing expenditure to develop it etc… think it was right…the OL and CGU part seemed really confusing, but i just did a straight forward, sum of all the figures and impaired the difference from the CV.. which Lease B giving a negative value so caused a Provision for that amount.. i kept thinking, surely there must be a catch to this somewhere which ihave not comprehended… will see 🙁
Lease C, i did a pv of the 3 years 50k rents in arrears (cos it was no breaking the lease clause, so a current and non-current liability once contract signed etc) then took off that amount the 70k or so that they paid one off immediately to in fact kill the lease, and the rest i said would have to go onto PL or OCI (cant remember) as Other Income cos it reversed previous provision… however i realise that potentially the previous provision might have had an account in assets under title of deferred rent etc.. not sure.. think i got something wrong in it..defined contributions vs benefit scheme.. thought that although risk to co. would indicate benefit scheme that it was only to cover the contributions in the first place that went to insurance company, and if they lost it the co. would need to top up and if they made something on it, then the co. would get this part back.. so ended up saying contributions a/c was ok… however the insurance co. stuff really confused me, and after the exam i remember the 30yrs at 5% part, thinking is the insurance co. like a Plan Asset vs Future Obligations thing… who knows ?
overall i think that i will be short of 50% but still hoping that decent performance in Q1 and some scrounging of marks thru Q2 and 3 get me over the line..
what i meant with the Lease C is that if they had a provision for the future rent, that using the accruals principle they would need to offset the future years rent with an asset account, then increase the provision with unrolling of discount annually and dump it into the rent expense for that year.. strange on.. obviously valid reason for it being on the exam.. haha
I struggled very much with timing, the questions are very long, by the time you read one, you’ve lost so much time, this is proving to be a difficult exam for myself, I think I’ll be back re-sitting for the 4th time in December!
@Alison long scenarios? Have you seen P3 ? 🙂
If you have attempted all questions you have a good shot of passing.Good luck everyone tomorrow!
Did anyone get the Msc Professional Accoutancy qualfication email? I’m hoping its a good omen that I’ve passed P2- entry criteria is to have completed P1, P2 and P3.
I have P1 and P3 completed so hopefully its a good sign!
Maybe I’m reading too much into it though.
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