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ACCA APPROVED CONTENT PROVIDER ACCA Approved Practice & Revision Kit Free access to our Exam Paper P2 Success site Corporate Reporting Look inside (International and United Kingdom) Practice & Revision Kit for examsup to June 2015ThiNganHang.com ThiNganHang.com
P R A C T I C PAPER P2 E CORPORATE REPORTING & (INTERNATIONAL AND UNITED KINGDOM) R E V BPP Learning Media is an ACCA Approved Learning Partner – content for the ACCA I qualification. This means we work closely with ACCA to ensure our products fully prepare you for your ACCA exams. S In this Practice and Revision Kit, which has been reviewed by the ACCA examination I team, we: Discuss the best strategies for revising and taking your ACCA exams O Ensure you are well prepared for your exam N ThiNganHang.comProvide you with lots of great guidance on tackling questions Provide you with three mock exams Provide ACCA exam answers as well as our own for selected questions K Our Passcard and i-pass products also support this paper. I T FOR EXAMS UP TO JUNE 2015 ThiNganHang.com
First edition 2007 Eighth edition June 2014 ISBN 9781 4727 1108 3 (previous ISBN 9781 4453 8001 8) e-ISBN 9781 4727 1172 4 British Library Cataloguing-in-Publication Data A catalogue record for this book All our rights reserved. No part of this publication may be is available from the British Library reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior Published by written permission of BPP Learning Media Ltd. BPP Learning Media Ltd BPP House, Aldine Place We are grateful to the Association of Chartered Certified London W12 8AA Accountants for permission to reproduce past examination questions. The suggested solutions in the www.bpp.com/learningmedia practice answer bank have been prepared by BPP Learning Media Ltd, except where otherwise stated. Printed in the United Kingdom by Ricoh UK Limited Unit 2 Wells Place MersthamThiNganHang.com RH1 3LG Your learning materials, published by BPP Learning © Media Ltd, are printed on paper obtained from BPP Learning Media Ltd traceable, sustainable sources. 2014 ii ThiNganHang.com
Contents Page Finding questions Question index .................................................................................................................................................................. v Topic index .................................................................................................................................................................... viii Helping you with your revision..................................................................................................................... ix Passing P2 Revising P2....................................................................................................................................................................... x Passing the P2 exam........................................................................................................................................................ xi Exam information ........................................................................................................................................................... xiii Analysis of past papers .................................................................................................................................................. xiii Exam update.................................................................................................................................................................... xx Useful websites ............................................................................................................................................................. xxii Questions and answers Questions..........................................................................................................................................................................3 Answers ..........................................................................................................................................................................95 Exam practice Mock exam 1 Questions ............................................................................................................................................................325 Plan of attack .......................................................................................................................................................333 Answers...............................................................................................................................................................334 Mock exam 2 Questions ............................................................................................................................................................353 Plan of attack .......................................................................................................................................................363 Answers...............................................................................................................................................................366 Mock exam 3 (December 2013) Questions ............................................................................................................................................................387 Plan of attack .......................................................................................................................................................399 Answers...............................................................................................................................................................401 ACCA's exam answers June 2013............................................................................................................................................................419 December 2013 ...................................................................................................................................................435 Mathematical tables..........................................................................................................................................449 Review formThiNganHang.com iii ThiNganHang.com
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Question index The headings in this checklist/index indicate the main topics of questions, but questions often cover several different topics. Questions set under the previous syllabus Advanced Corporate Reporting paper are included because their style and content are similar to those which appear in the P2 exam. The questions have been amended to reflect the current exam format. Time Page number allocation Marks Mins Question Answer Part A: Regulatory and ethical framework Financial reporting framework 1 Conceptual framework (12/07, amended) 25 45 3 95 2 Accounting standards and disclosure (12/08) 25 45 3 97 3 Lizzer (6/13) 25 45 4 100 4 Venue (12/11, amended) 25 45 5 103 Environmental and social reporting 5 Glowball (ACR, Pilot paper) 25 45 5 107 Part B: Accounting standards 6 Preparation question: Sundry standards – – 7 109 Non-current assets 7 Key (12/09) 25 45 8 112 8 Prochain (ACR, 6/06) 25 45 9 115 9 Johan (12/08) 25 45 10 117 10 Scramble (12/11) 25 45 11 120 Employee benefits 11 Preparation question: Defined benefit plan – – 12 123 12 Macaljoy (12/07, amended) 25 45 13 124 13 Savage (ACR, 12/05, amended) 25 45 14 127 14 Smith (6/09, amended) 25 45 15 128 Income taxes 15 Cohort (ACR, 6/02, amended) 22 40 16 131 16 Panel (ACR, 12/05) 25 45 17 132 17 Kesare (Pilot paper)ThiNganHang.com25 45 18 135 Financial instruments 18 Preparation question: Financial instruments – – 19 137 19 Complexity (12/09) 25 45 20 137 20 Ambush (ACR, 12/05, amended) 25 45 20 140 21 Grainger (6/11) 15 27 21 142 22 Aron (6/09, amended) 25 45 21 144 Share-based payment 23 Leigh (ACR, 6/07) 25 45 23 149 24 Margie (12/10) 25 45 24 152 25 Greenie (12/10) 25 45 24 154 Finding questions v ThiNganHang.com
Time Page number allocation Marks Mins Question Marks Events after reporting period, provisions and contingencies 26 Ryder (ACR, 12/05) 25 45 26 157 27 Royan (6/12) 25 45 26 160 28 Electron (Pilot paper) 25 45 27 162 Related parties 29 Egin Group (ACR, 6/06) 25 45 28 165 30 Engina (ACR, Pilot paper) 25 45 29 168 Leases 31 Preparation question: Leases – – 30 169 32 Holcombe (6/10, amended) 25 45 30 170 33 William (6/12) 25 45 31 173 Part C: Group financial statements Revision of basic groups 34 Marrgrett (12/08) 25 45 33 176 35 Preparation question: Associate – – 34 179 Complex groups 36 Preparation question: 'D'-shaped group – – 35 181 37 Preparation question: Sub-subsidiary – – 36 183 38 Glove (ACR, 6/07, amended) 25 45 38 185 39 Case study question: Minny (12/12) 50 90 39 190 40 Case study question: Trailer (6/13) 50 90 41 195 Changes in group structures 41 Preparation question: Part disposal – – 43 204 42 Preparation question: Purchase of further interest – – 45 206 43 Ejoy (ACR, 6/06, amended) 30 54 45 208 44 Case study question: Traveler (12/11) 50 90 47 211 45 Case study question: Robby (6/12) 50 90 49 218 46 Case study question: Bravado (6/09) 50 90 51 224 Foreign transactions and entities4748 Case study question: Ashanti (6/10, amended)Case study question: Grange (12/09)ThiNganHang.com5050 9090 5355 229236 49 Preparation question: Foreign operation – – 57 243 50 Memo (ACR, 6/04, amended) 32 58 59 245 51 Case study question: Rose (6/11) 50 90 61 248 Group statements of cash flows 52 Preparation question: Consolidated statement of cash flows – – 63 254 53 Case study question: Jocatt (12/10) 50 90 67 256 54 Case study question: Warrburt (12/08, amended) 50 90 70 261 vi Finding questions ThiNganHang.com
Time Page number allocation Marks Mins Question Answer Part D: Performance reporting Performance reporting 55 Alexandra (6/11) 25 45 74 266 56 Carpart (6/09, amended) 16 29 75 269 57 Ghorse (12/07) 25 45 76 271 58 Cate (6/10) 25 45 77 274 59 Calcula 25 45 78 277 Current developments 60 Preparation question: Current issues – – 79 281 61 Fair values and IFRS 13 25 45 80 285 62 Jones and Cousin (ACR 12/06) 25 45 81 287 Specialised entities and specialised transactions 63 Lockfine (6/11) 25 45 81 289 64 Burley (12/09, amended) 25 45 82 293 65 Seltec (6/10) 25 45 84 296 66 Ethan (6/12) 25 45 84 299 67 Norman (6/08) 25 45 85 302 68 Preparation question: Reconstruction scheme – – 86 304 69 Plans 15 27 87 308 70 Decany (12/11) 25 45 88 310 71 Lucky Dairy (ACR, 6/02, amended) 25 45 89 314 IFRS for small and medium-sized entities 72 IFRSs and SMEs (ACR, 6/06, amended) 25 45 90 316 73 Whitebirk (12/10, amended) 22 40 91 319 Mock exam 1 74 Ribby (6/08) 75 Coate (12/12) 76 Blackcutt (12/12) 77 Jayach (12/12) Mock exam 2ThiNganHang.com 78 Beth (12/07, amended) 79 Verge (6/13) 80 Janne (6/13) 81 Implementing IFRS (6/08) Mock exam 3 (December 2013) 82 Angel (12/13) 83 Havanna (12/13) 84 Bental (12/13) 85 Zack (12/13) Finding questions vii ThiNganHang.com
Topic index Listed below are the key Paper P2 syllabus topics and the numbers of the questions in this Kit covering those topics. If you need to concentrate your practice and revision on certain topics or if you want to attempt all available questions that refer to a particular subject, you will find this index useful. Syllabus topic Question numbers Associates 36 Complex groups 37 – 40 Consolidated statement of financial position 45 Consolidated statement of profit or loss and other comprehensive income 39 Consolidated statement of cash flows 52 – 54 Corporate citizenship 62 Disposals 41 – 48 Employee benefits 11 – 14 Environmental issues 5 Ethics 44 – 48 Financial instruments 18 – 22 Foreign currency 49 – 51 IAS 1 (revised) Throughout Impairment 57, 60 International issues 62, 77 IFRS 2 23 – 25 IFRS 3 34 – 54 IFRS 9 18 – 22 IFRS 10 to 12 34 – 54 IFRS 13 61, throughout Joint ventures 65 Measurement of performance 56 – 59 Non-current assets 7 – 10 Provisions 26 – 28 Related party transactions 29, 30 Reporting performance 55 Revenue recognition 4, 9, 56 Share-based payment 23 – 25 Small and medium-sized entities 72, 73 Taxation 15 – 17 ThiNganHang.com viii Finding questions ThiNganHang.com
Helping you with your revision BPP Learning Media – Approved Learning Partner – content As ACCA's Approved Learning Partner – content, BPP Learning Media gives you the opportunity to use exam team reviewed revision materials. By incorporating the examination team's comments and suggestions regarding syllabus coverage, the BPP Learning Media Practice and Revision Kit provides excellent, ACCA-approved support for your revision. Tackling revision and the exam Using feedback obtained from the ACCA exam team review: We look at the dos and don'ts of revising for, and taking, ACCA exams We focus on Paper P2; we discuss revising the syllabus, what to do (and what not to do) in the exam, how to approach different types of question and ways of obtaining easy marks Selecting questions We provide signposts to help you plan your revision. A full question index A topic index listing all the questions that cover key topics, so that you can locate the questions that provide practice on these topics, and see the different ways in which they might be examined Making the most of question practice At BPP Learning Media we realise that you need more than just questions and model answers to get the most from your question practice. Our Top tips included for certain questions provide essential advice on tackling questions, presenting answers and the key points that answers need to include We show you how you can pick up Easy marks on some questions, as we know that picking up all readily available marks often can make the difference between passing and failing We include marking guides to show you what the examiner rewards We include comments from the examiners to show you where students struggled or performed well in the actual exam We refer to the 2014 BPP Study Text (for exams up to June 2015) for detailed coverage of the topics covered in questions ThiNganHang.compapers. Used in conjunction with our answers they provide an indication of all possible points that could bemade, issues that could be covered and approaches to adopt.In a bank at the end of this Kit we include the official ACCA answers to the June and December 2013 Attempting mock exams There are three mock exams that provide practice at coping with the pressures of the exam day. We strongly recommend that you attempt them under exam conditions. Mock exams 1 and 2 reflect the question styles and syllabus coverage of the exam; Mock exam 3 is the December 2013 paper. Helping you with your revision ix ThiNganHang.com
Revising P2 Topics to revise P2 has the reputation of being a difficult paper. However its pass rate is usually quite high. Although the examiner sets challenging questions, the styles of question used are now familiar. The examiner has also provided a great deal of feedback via examiner's reports and in the very detailed published marking schemes, many of which are included in this Kit. The examiner has warned very strongly against question-spotting and trying to predict the topics that will be included in the exam. On occasions the same topic has been examined in two successive sittings. The examiner regards few areas as off-limits for questions, and nearly all of the major areas of the syllabus can and have been tested. That said, exams over the years have shown that the following areas of the syllabus are very important, and your revision therefore needs to cover them particularly well. Group accounts. You should not omit any aspect of group accounts, as they come up every sitting. We would advise against question spotting, but if a statement of cash flows, say, has not come up for a few sittings, it might be a good bet. Group accounts will always be examined as part of the 50 mark case study question, in which you may also expect a question on some aspect of ethics. Emerging issues. The impact of a change in accounting standards on the financial statements is often examined. Look on the IASB website for details: www.iasb.org Share based payment usually comes up as part of a question. Financial instruments was the subject of regular Student Accountant articles, and it is regularly tested. Questions will be set in terms of IFRS 9 as far as it applies. Developments in financial reporting, for example, the exposure drafts on leasing and revenue recognition. Question practice Question practice under timed conditions is essential, so that you can get used to the pressures of answering exam questions in limited time and practise not only the key techniques but allocating your time between different requirements in each question. Our list of recommended questions includes compulsory Section A and optional Section B questions; it's particularly important to do all the Section A case-study-style questions in full as a case study involving group accounts will always come up. ThiNganHang.com x Revising P2 ThiNganHang.com
Passing the P2 exam What to expect on the paper Of course you cannot know in advance what questions are going to come up, but you can have a fair idea of what kind of questions. Question 1 This will always be a case study, with half or a little more than half on group accounts. It will often involve high speed number crunching. Easy marks, it cannot be said too often, will always be available for basic consolidation techniques. You cannot pass the groups part on these alone, but it can give you a foothold. Question 1 usually has a bit of a twist, for example financial instruments or pensions. This question will also contain an element of written explanation and a question on ethics or corporate social accounting. For example, the December 2010 paper had a statement of cash flows; then you were asked to explain whether a change of method of preparing such a statement was ethical. The examiner has stressed the importance of answering the written parts of question 1. Many students ignore parts (b) and (c), but marks can be gained for common sense. Question 1 will always have more than half the marks allocated to the computational part. Generally, it will be in the order of 35 marks. Questions 2 and 3 These each cover several IFRSs and are very often – although not always – mini-case-studies, involving you in giving advice to the directors on accounting treatment, possibly where the directors have followed the wrong treatment. Being multi-standard, you may be able to answer parts, but not all of a question, so it makes sense to look through the paper to select a question where you can answer most of it. If Part (a) is on an area you are not confident about, do not dismiss the question out of hand. The examiner is testing whether you can identify the issues. Even if you don't get the accounting treatment exactly right, you will still gain some credit for showing that you have seen what the problem is about. So do not be afraid to have a stab at something, even if you are not sure of the details. These questions can be on a single standard or theme. One of these questions will be the specialised industry question. Question 4 This question is generally on developments in financial reporting. It may cover an aspect of reporting financial performance – for example the Management Commentary, but it can also be set on just one standard if this standard is undergoing revision. This question can feature criticism of existing standards, as well as aspects of new or proposed standards.While you certainly cannot bluff your way through Question 4, if you know your material it is a good way of earningmarks without high speed number crunching.ThiNganHang.com Question 4 may now include a computational aspect illustrating the topic you have just discussed. Usually these are fairly straightforward. Revising P2 xi ThiNganHang.com
Remember! The examiner stresses that it is important to learn principles rather than rote-learning techniques. He has also said on a number of occasions that candidates should use the information in the scenario. For example, in June 2012: 'Often the content of the scenario will help students answer the question as the scenario gives candidates direction in terms of their answers.' The examiner has stated that students need to have a basic/good understanding of all standards and the capability of applying them. They should always give an explanation of the IFRSs which underpin their answer. Exam technique for P2 Do not be needlessly intimidated There is no shortcut to passing this exam. It looks very difficult indeed, and many students wonder if they will ever pass. But most students generally do. Why is this? Easy marks All the questions are demanding, but there are many easy marks to be gained. Suppose, for example, you had a consolidated statement of cash flows with a disposal, a pension complication and a financial instruments calculation. There will be easy marks available simply for the basic cash flow aspects, setting out the proforma, setting up your workings, presenting your work neatly. If you recognise, as you should, that the disposal needs to be taken into account, of course you will get marks for that, even if you make a mistake in the arithmetic. If you get the pension bit right, so much the better, but you could pass the question comfortably while omitting this altogether. If you're short of time, this is what you should do. Be ruthless in ignoring the complications Look at the question. Within reason, if there are complications – often only worth a few marks – that you know you will not have time or knowledge to do, cross them out. It will make you feel better. Then tackle the bits you can do. This is how people pass a seemingly impossible paper. Be ruthless in allocating your time At BPP, we have seen how very intelligent students do two almost perfect questions, one averagely good and one sketchy. The first eight to ten marks are the easiest to get. Then you have to push it up to what you think is 15 (30 for the case study question), to get yourself a pass. Do your best question either first or second, and the compulsory question either first or second. The compulsory question, being on groups, will always have some easy marks available for consolidation techniques.ThiNganHang.com xii Revising P2 ThiNganHang.com
Exam information Format of the exam Number of marks Section A: 1 compulsory case study 50 Section B: Choice of 2 from 3 questions (25 marks each) 50 100 Section A will consist of one scenario based question worth 50 marks. It will deal with the preparation of consolidated financial statements including group statements of cash flow and with issues in financial reporting. Students will be required to answer two out of three questions in Section B, which will normally comprise two questions which will be scenario or case-study based and one question which will be an essay. Section B could deal with any aspects of the syllabus. Additional information The Study Guide provides more detailed guidance on the syllabus. Analysis of past papers December 2013 Section A 1 Consolidated statement of cash flows with acquisition of subsidiary and adjustments for deferred tax, a government grant and a pension plan; classification of cash flows; ethics Section B 2 Revenue recognition; impairment loss; sale and leaseback 3 Specialised industry question set in a bank, covering debt versus equity, hedging and the application of IFRS 10 in determining which party is the acquirer 4 IAS 8: use of judgement in selecting accounting policies; prior period errors (three scenarios) The December 2013 Paper is Mock Exam 3 in this Kit. June 2013 Section A Question in this Kit 1 Consolidated statement of financial position with a 'D’-shaped group; comparisonof methods for valuing non-controlling interest; ethicsThiNganHang.com40 Section B 2 Segment reporting, revenue recognition, provisions and property-related matters 79 3 In-depth analysis of whether a lease was a finance lease, a discontinued operation 80 and fair value of an investment property 4 Importance of and barriers to disclosures in annual reports and application to a 3 scenario Revising P2 xiii ThiNganHang.com
Examiner's comments The examiner stressed again the importance of answering all questions and all parts of questions, and also of exam technique: exam technique consists of a few simple procedures that can help the candidate immeasurably. Answers should have a structure and cover points in an organised way. It may be best to write less on each point, leave out some of the background knowledge but focus on the facts/scenario in the question. The examiner does not need to know, for example, the role of the IASB in standard setting unless specifically asked in the question but often candidates may outline this as an introduction to an answer. There is always a model solution to the question but in practice there are always opposing viewpoints, and candidates should not be afraid of expressing these viewpoints as they will not be penalised if the rationale is acceptable. The questions are not written to trick candidates but it is important to read the question carefully. Always ask yourself, is what I am including relevant to the question? Successful candidates demonstrate relevant knowledge by using ideas and concepts from recommended accounting practice. Practical examples from reading current articles are important ways of supporting the points made. Many candidates simply set out everything they know, hoping that some of the material is relevant. There is a need for a broader understanding rather than rote- learnt facts. Candidates should try and use proper sentences and paragraphs rather than bullet points, as this will contribute to the awarding of professional marks. Candidates should never use abbreviations of words such as text language. December 2012 Section A Question in this Kit 1 Consolidated statement of financial position with sub-subsidiary, associate and 39 disposal group; discussion on IFRS 5; ethical considerations of accounting treatment Section B 2 Government grant; foreign exchange and cash flows; IFRS 10 and control; taxation 75 and prior period adjustment 3 Investment property; leasing (substance of transaction); provision; impairment 76 IFRS 13 Fair value measurement: principles, three-level hierarchy; IFRS 13 fair 4 valuing of asset and liability with computations 77 Examiner's comments Candidates performed quite well in this session. As usual the paper dealt with a wide range of issues and accounting standards. There are several key principles in each standard, which are the basis of most of the examination questions, and candidates should concentrate on understanding and interpreting these principles. Candidates need to understand the standards, and not just learn their content. Understanding will lead to betterThiNganHang.com application in the examination. Candidates should practice divergent thinking, which is the ability to think of several possible answers to a question before providing the solution. This is the ability to see potentially different outcomes for a given set of circumstances. This will lead to candidates having the ability to apply the standards to different scenarios. Every examination session produces scenarios, which candidates will not necessarily have met before, and thus there is a need for this type of reasoning. Candidates often simply recite the standard leaving the marker with the task of determining how applicable the answer actually is to the question. Candidates should adopt a model of learning which suits them and by doing this; candidates will be better prepared for the examination. xiv Revising P2 ThiNganHang.com
June 2012 Section A Question in this Kit 1 45 Consolidated statement of financial position with business combination achieved in stages and joint operation; de-recognition of financial asset ; ethics Section B 2 Sale and leaseback, defined benefit pension plan, cash-settled share-based payment 33 and contingent liability in the context of a business combination 3 Measuring fair value, impairment of goodwill, deferred tax liabilities and the fair 66 value option for an accounting mismatch; shares as financial liability or equity 4 Changing rules on provisions (discussion and calculation) 27 Examiner's comments Generally candidates performed well on this paper, with Questions 1 and 2 being answered better than Questions 3 and 4. Candidates approached the examination well and did not appear too time-pressured, but some failed to produce answers of sufficient length and appear to be spending too much time on question 1. Question 1( a) is designed to test candidates' computational skills and very brief explanations may be useful to the marker but many candidates entered into detailed discussion of the relevant standard, which costs time in the examination, and it is important for candidates to use their time effectively. Very few marks are allocated in question 1(a) for detailed discussion. Candidates often wasted time discussing a standard in detail when an application of the standard was required. Candidates should read the question and formulate an answer in their mind. The answer should be based upon the detail of the question. Simply reading the requirement without application to the scenario does not gain marks. This examination focussed on application of knowledge and it was application, which often let candidates down. Candidates often do not use the information in the scenario in order to develop their answers. Often the content of the scenario will help students answer the question as the scenario gives candidates direction in terms of their answers. This was particularly true of Question 4. December 2011 Section A Question in this Kit 1 Consolidated statement of financial position with business combination achieved in 44 stages; segment reporting; ethics Section B23 Specialised industry question: intangible assets and impairment testing rulesInternal reconstructionThiNganHang.com7010 4 Revenue recognition: current problems and proposed changes 4 Revising P2 xv ThiNganHang.com
Examiner's comments The standard of answers varied. Many candidates passed the examination because of strong performance on question 1 and the questions answered best by candidates were Question 1a, Questions 3(a/c), and Question 4(a)(i). Answers to Section B questions are often very general in nature with no relationship to the facts given in the scenario. This can involve just repeating information given in the question without explaining how it impacts on the financial statements or just quoting facts from standards without reference to the question. This can result in long answers that often don't address the issues in a scenario and may leave candidates bemused as to why they have failed when they have written so much. Often these scripts bordered on illegibility, which makes marking difficult. It is often better to explain a few points well than trying to regurgitate all the knowledge that the candidate possesses. There were however many excellent scripts, particularly in answering the technical aspects of group accounting and the issues surrounding intangible assets. Too many candidates let themselves down by failing to attempt all parts of the questions chosen, or in some cases by answering all four questions. June 2011 Section A Question in this Kit 1 Groups with a foreign subsidiary, other adjustments and the remainder on ethical 51 issues Section B 2 Specialised industry question with IFRS 1, IFRS 3 intangible assets and 64 restructuring plans and provisions 3 Specialised industry question with reclassification of long-term debt, correction of 55 an error 4 Change to IFRS 9 rules for financial assets; change to expected loss model for 21 impairment of financial assets Examiner's comments The examination consisted of four questions (Question 1 for 50 marks and three further questions of 25 marks each of which candidates had to choose two to answer) The performance of candidates was quite pleasing with good marks being achieved in all aspects of the paper. The approach to the examination is good with little evidence of time pressure although some candidates are still failing to produce answers of sufficient length and appear to be spending too much time on a single question. Candidates do not use the information in the scenario in order to develop their answers. Question 1 is designed to test candidates' computational skills and brief explanations are often useful to the markerbut detailed discussion of the relevant standard is not normally required. Candidates often wasted time discussing astandard in detail when an application of the standard was required. It is important also to make sure that theanswer is relevant to the question. In this exam there was evidence of students discussing standards at length thatThiNganHang.com were not relevant to the question. xvi Revising P2 ThiNganHang.com
December 2010 Section A Question in this Kit 1 Consolidated statement of cash flows 53 Section B 2 Share-based payment; derivatives 23 3 Provisions, contingent liability, significant influence; share-based payment 24 4 Small and medium-sized entities 73 Examiner's comments This was a demanding paper dealing with a range of issues and accounting standards, but candidates responded well resulting in a good pass rate. However, when issues get more complex, they perform less well. Topical issues of a discursive nature are quite well done, indicating a good awareness of current issues. However, the computational parts are often poorly completed which again seems to indicate that application of knowledge is a problem. Additionally, some candidates do not write in sufficient detail on the discursive parts of the paper, and do not answer the question set. A significant part of the paper comprises discursive elements and candidates need to develop skills in this area. Where possible, candidates should make sure that they show all workings and start each question on a new page. Time management issues seem to have been less prevalent in recent diets, but where the time allocated to a question is over, candidates should move on and start a new question, leaving sufficient space to come back and finish the question if time allows. Candidates seem to have difficulty applying standards to the scenarios given in the questions, even though they have the knowledge, and the scenario can often give help in answering the question. There are several key principles in each standard. Sometimes these are lost in the detail of the standard. These principles are the basis of most of the examination questions and candidates should concentrate on these principles. June 2010 Section A Question in this Kit 1 SPLOC1 with two disposals and adjustments relating to other topics 48 Section B 2 Deferred tax; impairments; deemed disposal/discontinuation; retirement benefits 58 3 Specialised industry: derivatives and hedging; brands; purchase of retail outlets through companies 65 4 Flaws in accounting for leasing; numerical adjustments on sale and leaseback 32 Examiner's commentsThiNganHang.com The pass rate for this paper was satisfactory, and the examiner was generally pleased with the way candidates responded to a testing paper covering a wide range of accounting issues and standards. Examination techniques were well applied. However yet again there was evidence of candidates only answering two questions rather than the three questions required, and also leaving out the ethics part of question 1, suggesting that they do not appreciate the importance of attempting all of the examination paper, or perhaps particular problems with ethical instruments. Some candidates still do not have a good understanding of accounting for financial instruments which are examined frequently in this paper. It is essential that candidates get to grips with this topic. Revising P2 xvii ThiNganHang.com
December 2009 Section A Question in this Kit 1 Consolidated statement of financial position with changes in group structure 47 Section B 2 Impairment: discussion and calculation 9 3 Revenue recognition; recognition of assets; joint control 64 4 Complexity in financial instruments 19 Examiner's comments The paper dealt with a wide range of issues and accounting standards. The examiner said that the paper was quite testing but that candidates responded well resulting in a pleasing pass rate. Candidates had benefited from reading articles in Student Accountant on specific topics and had built on their knowledge, particularly of the revised IFRS 3 and financial instruments. Candidates also seem to have applied good examination techniques in answering the paper. In particular, candidates were not making the mistake of missing out questions or parts of questions. June 2009 Section A Question in this Kit 1 Business combination achieved in stages; ethics 46 Section B 2 Financial instruments: fair value, convertible bonds, derecognition, foreign subsidiary’s 22 debt, interest on employee loan 3 Revenue recognition, assets 56 4 Employee benefits: problems of current treatments 14 Examiner's comments. This was the first sitting where the technical aspects of IFRS 3 (Revised) 'Business Combinations' were examined in question 1. It seemed as though many candidates were not adequately prepared for the question even though several articles had appeared in the student accountant. The results overall were disappointing. The main reasons for this appeared to be lack of a thorough understanding of IFRS 3 (Revised), poor time management and difficulty in applying knowledge to questions. An important aspect of the paper is the current issues question. Generally speaking current issues would comprise those issues being discussed in the accountancy press or those issues being dealt with by the IASB in its current work programme or very recent accounting standards. Candidates do not perform well on current issues questions and in order to improve their performance in this area, they should make sure that they manage their own learning by reading wider than just course notes and manuals. The IASB work programme for example is open for everyone to view and web sites such as www.iasplus.com are available for candidates to read around subjects that are on the programme.ThiNganHang.com December 2008 Section A Question in this Kit 1 Group statement of cash flows with adjustments and interpretation; ethics 54 Section B 2 Changes to accounting for business combinations 34 3 Tangibles, intangibles and revenue recognition 9 4 Accounting standards and disclosure 2 xviii Revising P2 ThiNganHang.com
Examiner's comments. The paper was generally well answered and the pass rate was pleasing. However candidates must learn to apply their knowledge and not simply reiterate definitions. The approach to the examination seems to be improving with little evidence of time pressure although some candidates are still failing to produce answers to all parts of the paper and appear to be spending too much time on question 1. Also candidates are often not using the information in the question to develop their answers even when the question requires the information to be used. There is a minimum amount of information required in each question in order to gain a pass standard and candidates do sometimes not appreciate this. ThiNganHang.com Revising P2 xix ThiNganHang.com
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