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Looked fine to me until I went through questions but when took the pen and started scenario, mind was completely black out. Completely shut down. I thought I know very well TP, EVA, BSC, Five Forces and but when started scenario, have no idea how to match them. Oon the basis of requirements and scenario data, I just started writing and not sure whether its relevant or not, even its an answer of the question or not? Did 85% and then time was up.
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Did Q1 wasn’t too bad.. not sure though that I addressed all parts of each requirement. EVA was higher
debt/equity=100% thus they are equal the adjustment in WACC was to use the post tax cost of debt and I got WACC as 10.38% =(16× 0.5) +((6.8×0.7)×0.5)NOPAT think was 479.2 adjustments added back marketing for the two years, and the 40 for operating leases, used actual tax paid, added back R&D 10 expensed in the current year, took off depreciation for the operating lease 28.8 (115/4)
Capital employed, think about 2406.1 used opening value capital employed added marketing for one year added operating lease less one year depreciation and deferred tax
Q2. not my cup of tea.
Q3 was okay, also got 540 more passangers for region A at peak times and was the only time it was overcrowded
Q4 was so confusing in part a,
part b has been examined before I think the changing role of the Management accountant.
My main problem is time pressure… to read and understand the requirements then read the scenario, then when writing to ensure all parts of the requirements have been answered and all in good handwriting for 3 hours!!
I think I’ve done enough but might be wrongPaper was horrible today! Probably the worst I’ve seen from this examiner so far. Someone rightly said the requirements seemed like the movie ‘inception’. I think I did okay with Q1a, messed up in KPIs and costing approaches part. How else would you measure innovation if not through the number of new products? Thought I did okay in 3a until I read 3c, then I was just doomed thinking what else to write since I covered all aspects in the first part. Q4 looked cake until I hadn’t read and tried to attempt it. Lost a lot of time so I couldn’t have switched to Q2. Crazy crazy paper.
I am trying my best to be hopeful that I got 50. It’s amazing that everyone shares the same sentiment about the exam. I was really looking forward to a question on integrated reporting.
Who is managed a 540 overcrowded ??? And please tell me about transfer pricing question .. did any one concluded that changing transfer pricing would have impact a increase in loss in Cleland ?
@ruth12 said
NOPAT think was 479.2 adjustments added back marketing for the two years, and the 40 for operating leases, used actual tax paid, added back R&D 10 expensed in the current year, took off depreciation for the operating lease 28.8 (115/4)
Why would you depreciate operational leasing as ownership is transfered in the end to the leasee? The leaser should account for depreciation as far as I remember
625 for region A during peak (2500/4) less the 7*70 seat capacity (625-490) 135 passengers didn’t have any seat.
For the transfer price question using full cost would increase the profits reported by the RM divisional managers but those in Hoots cost would be even more since the will have a higher cost per unit plus 8% tarifs. the increase cost in a competitive market will mean loss of sales for Hoot.
Guys i sat this paper in glasgow today….
They were playing contineous loud dance music through out the exam ( from a party downstairs)…
I ended up having a panic attack and for sure have failed this paper . Like many in this hall i have complained bitterly to acca in writing as this should never have been allowed to happen.
It was such an awful paper and to have some party blaring music and i do mean blaring gave most of us no hope.
Put it this way . Invigilators nearly had a riot on there hands and calculators were nearly launched as 120 of us struggled through this impossible paper ..
Gutted absolutely exhausted and gutted
@alexandrastanca said:
Why would you depreciate operational leasing as ownership is transfered in the end to the leasee? The leaser should account for depreciation as far as I rememberfor EVA all leases operating or finance are treated as finance. since a figure was not given for economic depreciation and it is can be assumed that the economic depreciation is 115/4, further assumption could be that the 40 charged as lease should be added back and the economic depreciation removed.
(all that said – i honestly dont know if i did all that in exam)
540 overcrowded I am not sure how did I get it . On transfer pricing moving to full cost will result in lost benefit of tax on the loss (sale690-cost 690) results in zero profit or loss hence no tax benefit or expense . Under marginal costing (price 629- COST 690) loss 61 (TAX BENEFIT ON LOSS (18.30) (61*30%)
How did you all calculate Eva? It really sent me into a massive spin of failure thoughts, then run out of time because I overrun on Q1 and Q3 and Q4 were a lot more difficult than they first appeared. I rambled on about anything I could think of on the subject hoping to pick up random points but presentation was messy and due to time constraints I only attempted 80%…. Will I have done enough? I felt confident when I walked in the hall and felt crushed by the end of the 3 hours. 🙁
Overall I believe that the exam is all that I thought it would be ( a very hard, time pressured paper, ambiguous requirements that can be interpreted based on the reader).
The EVA calculation was a God send as at least i can receive some marks from that.
the rest of question one CSFs and KPIs while it is somewhat expected i believe explaining then apply the three new manufacturing system to all three that’s a bit time consuming. ran out of time for the final requirement
Q2 and 3 where the other two i attempted. while Q3 looked easy enough as Balance score card was tested in F5 and P3 it was a bit difficult to put the points in as the CEO didnt want measurement but how it would improve the performance – it was quite easy to get off track
again the calculation of the overcrowding issue was a saving grace.
unfortunately i ran out of time before being able to do justice to the final requirement.
i hope for a 50, wish the same for all of you
Frustrating that even though you can have a sound knowledge of the syllabus the examiner includes questions that are designed to confuse and to be completely ambiguous. Question4 was a prime example.
This paper didn’t test understand of the syllabus if only tested how dast you can read, write and interpret nonsense questions.
Feels line a big brick wall in the way of ACCA qualification!!!@latoyah84 said:
Overall I believe that the exam is all that I thought it would be ( a very hard, time pressured paper, ambiguous requirements that can be interpreted based on the reader).The EVA calculation was a God send as at least i can receive some marks from that.
the rest of question one CSFs and KPIs while it is somewhat expected i believe explaining then apply the three new manufacturing system to all three that’s a bit time consuming. ran out of time for the final requirement
Q2 and 3 where the other two i attempted. while Q3 looked easy enough as Balance score card was tested in F5 and P3 it was a bit difficult to put the points in as the CEO didnt want measurement but how it would improve the performance – it was quite easy to get off track
again the calculation of the overcrowding issue was a saving grace.
unfortunately i ran out of time before being able to do justice to the final requirement.
i hope for a 50, wish the same for all of you
540 overcrowded I am not sure how did I get it . On transfer pricing moving to full cost will result in lost benefit of tax on the loss (sale690-cost 690) results in zero profit or loss hence no tax benefit or expense . Under marginal costing (price 629- COST 690) loss 61 (TAX BENEFIT ON LOSS (18.30) (61*30%)
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Thanks Latoyah for replying re operating leases to Alexandra.
Q3. the 540 extra passangers (135 per train) overcrowded is from working out the capacity and comparing to passangers travelling.
At peak in region A there was 4 trains with 7 carriages each has 70 seats thus capacity is (4 ×7 ×70)=1,960 but there was 2500 passangers for region A at peak times hence the 540 extra 2500-1960 which have to stand in the 4 trains thus 135 extra per train. .I felt like it was an easy paper.. or that i was really well prepared. Except.. i was time pressured :/ i could do about 80% of it. But i “think” i did quite well in that…
Please God.. make me pass this time…
I did question 2 and 3. Question 2 and 3 were both very similar to June 2013 exam and sir Gromit’s lectures on those questions so awesome 🙂 (Transfer pricing and Balance scorecard). However i think i did really well in question 1 too (EVA, JIT, Kaizen, implementation of a new IS). If only there was more time…For q4(b), it goes something like this: access how the role of treese management accountant will change as a result of new IT system and strategic initiatives and benefits it will bring to the company. Quite confused on whether the benefits here should be in the context of the new IT system or due to changes in management accountant.
This paper was really crazy… Is there moderation for this paper?
My take on the exam. Like many others have said
Q1 was fair. Nothing too difficult although had to rack my brains a bit on suggesting a new KPI. The project initiatives were interesting as I could relate the quality projects to a CSF but the KPI had little or no relevance to the innovation CSF
Q3 balance score card. Good question, not too difficult
Q4 thought was easy because it was five forcesuntil I actually read the requirement and scenario. Mind went blank. Wrote a lot of Rubbish because I didn’t understand the requirement.
Overall, I think I completely botched q4 and it’s almost a write off.
Looks like a resit or I’m taking p6
This was my second attempt to pass P5. In June 2015 I scored 49 marks.
In June I was almost crying during the exam because I could not understand the questions asked although I was well prepared and had very good results from mock exams.
This time the exam was not so difficult compared to June 2015 siting. I finished all three questions in time and used two booklets.Question 1 was pretty short compared to previous sittings.
Regarding EVA.
R&D should be capitalised (Profit and CE adjusted)
Operating leases should be capitalised AND depreciation charged (adjustments to profit and CE)
Economics depreciation = accounting depreciation
In WACC calculation post tax cost of debt should be used.
D/E = 100% means that D=E means that D/(D+E) = 50% and E/(D+E) = 50%
Opening balance of CE should be used.Question 3 seemed to be the easiest one.
The trains were overcrowded in peak times, in other times the occupancy was not so bad.Question 4 was very strange.
(a) I did not understand why there were given all five forces although we were required to analyse only those with high threat.
(b) I focused on IT system impact but ignored the three strategies mentioned in the question and in the scenario as I did not understand well what these strategies are about.After two attempts of passing this paper I have the following understanding about the examiner’s approach:
This paper does not test your knowledge of theory. The examiner stated that the difficulty level is compared to postgraduate degree. At this level you are not expected just the repeat the learned words and phrases. You need to be able to analyse, compare, make conclusions, give recommendations. The same will be required at your real job. Nobody cares that you can name all five Porter’s forces. You will need to propose how to change the performance of the company to deal with these forces and stay competitive.I was not sure what to think of the Operating Profit – It could have meant Profit After Tax based on how the calculations were completed. Therefore, I was also thinking that the junior accountant wrote operating profit instead of profit after tax. Thus, I recalculated NOPAT using this assumption – that is, operating profit should be profit after tax. What do you think?
Operating profit is the profit from operations, before deduction of interest and tax.
Check the technical article about EVA. It describes two methods of calculating NOPAT – you can start with operating profit OR start with profit after tax. There will be some slight differences in adjustments related to interest expenses.
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