FAE 2011 Where to begin

ahtfulal

Anyone else think the cases are pure waffle? Like I tried writing one myself there out of boredom.....


You are Ipee Freely, newly qualified accountant. It's a miserable day to start your first day in your new company "Fiddlesticks" the forecast gave for warm sunshine with the chance of the odd light shower but "oh bol**x" you thought to yourself as the lava started spilling from the volcano high above the town.

Just as your about to make a pee in your pants from the sight of the erupting volcano your new boss Sammy "big mac" McGee calls "Story Ipee it's Sammy here, what's sizzling my friend? I need a favour lad on your way into the office. 2 bacon rolls, pint of milk, 4 bottles of water and some ice creams because I hear it's gonna be a hot one today"

Sorry couldn't finish case because volcano reached town and everybody perished including big mac and Ipee.

LightningBolt

ahtfulal wrote: »

Anyone else think the cases are pure waffle? Like I tried writing one myself there out of boredom.....


You are Ipee Freely, newly qualified accountant. It's a miserable day to start your first day in your new company "Fiddlesticks" the forecast gave for warm sunshine with the chance of the odd light shower but "oh bol**x" you thought to yourself as the lava started spilling from the volcano high above the town.

Just as your about to make a pee in your pants from the sight of the erupting volcano your new boss Sammy "big mac" McGee calls "Story Ipee it's Sammy here, what's sizzling my friend? I need a favour lad on your way into the office. 2 bacon rolls, pint of milk, 4 bottles of water and some ice creams because I hear it's gonna be a hot one today"

Sorry couldn't finish case because volcano reached town and everybody perished including big mac and Ipee.

Haha, definitely looks like there's a few wannabe authors in some of those case studies.

backtothebooks

ahtfulal wrote: »

Anyone else think the cases are pure waffle? Like I tried writing one myself there out of boredom.....


You are Ipee Freely, newly qualified accountant. It's a miserable day to start your first day in your new company "Fiddlesticks" the forecast gave for warm sunshine with the chance of the odd light shower but "oh bol**x" you thought to yourself as the lava started spilling from the volcano high above the town.

Just as your about to make a pee in your pants from the sight of the erupting volcano your new boss Sammy "big mac" McGee calls "Story Ipee it's Sammy here, what's sizzling my friend? I need a favour lad on your way into the office. 2 bacon rolls, pint of milk, 4 bottles of water and some ice creams because I hear it's gonna be a hot one today"

Sorry couldn't finish case because volcano reached town and everybody perished including big mac and Ipee.

What's the betting you crash and burn again this sitting?!

It's not writing case studies that you're being examined on, 'tis answering them that you're supposed to be at!!

ahtfulal

Don't be such a dry s***t accountant backtothebooks. Not being smart or anything but its alright to have a sense of humour! Not all about getting exams.

Jamesw2

Fiona44 wrote: »

Great thanks a mill!:)

Sorry, I have another question someone might be able to shed some light on - In the first case in the auditing elective they change the method of valuing inventory from FIFO to the retail method. And in the solution it says that this is not a change in accounting policy. But in other examples I have it says that changes in inventory valuation (specifically from LIFO to FIFO or from FIFO to weighted average) DO constitute a change in accounting policy. Im assuming the sample solution is right so how come it isnt a change in policy does anyone know?!

Does anyone have an answer to this??

Jamesw2

ahtfulal wrote: »

Don't be such a dry s***t accountant backtothebooks. Not being smart or anything but its alright to have a sense of humour! Not all about getting exams.

HEAR HEAR. I FOUND YOUR CASE VERY AMUSING AND NOT VERY UNLIKE WHAT WE HAVE BEEN SERVED UP BY THE experts.!!!!!

Nidot

Jamesw2 wrote: »

Fiona44 wrote: »

Great thanks a mill!:)

Sorry, I have another question someone might be able to shed some light on - In the first case in the auditing elective they change the method of valuing inventory from FIFO to the retail method. And in the solution it says that this is not a change in accounting policy. But in other examples I have it says that changes in inventory valuation (specifically from LIFO to FIFO or from FIFO to weighted average) DO constitute a change in accounting policy. Im assuming the sample solution is right so how come it isnt a change in policy does anyone know?!

Does anyone have an answer to this??

From my understanding this qualifies as a change in accounting estimate. Under IAS2 - Inventoies you can calculate inventoru value based on several methods ( weighted average, fifo, retail method - lifo not perscribed for usage) therefor changing which method to use is a change in accounting estimate rather than a change in accounting policy as you're still using IAS2 for inventory valuation.


Thats my interpterpretation on it but i'm open to correction.

Maps2011

Please post a copy of your lecture timetable from 2010/2011?

Moorstown

Any thoughts on PM, management accounting after the mock exams and seeing as it wasn't asked last year? Thanks in advance.

Maps2011

If nobody wants to post their timetable publicly the please pm it to me.
Much appreciated - trust me.

Moorstown

FLEXUM LIMITED.

In relation to primary indicator 2, can anyone tell me how in calculating the Manufacturing staff 1,600 hours x (€60,000 / 1840 hours) = €52,174. Where is the figure €60,000 got from and should it not be €600,000.

Thanks in advance.

noveltea

FLEXUM LIMITED

I think the €60,000 is 400 joints @ €150 cost per joint...What I cant figure out is where the €25,760 for design staff is coming from

Moorstown

FLEXUM LIMITED.

That doesn't make sense to me as they use €60,000 in both Extendor Contract and Embryo Tools. The €25,760 is basically 1,840 hours *1.4 times (as they work 40% more than scheduled) x 10 staff.

Rickyroma

Maps2011 wrote: »

If nobody wants to post their timetable publicly the please pm it to me.
Much appreciated - trust me.

Sample 2010/11 timatable to Christmas - mainly but not exclusively revision of CAP 1 and CAP 2 material

Jamesw2

Nidot wrote: »

From my understanding this qualifies as a change in accounting estimate. Under IAS2 - Inventoies you can calculate inventoru value based on several methods ( weighted average, fifo, retail method - lifo not perscribed for usage) therefor changing which method to use is a change in accounting estimate rather than a change in accounting policy as you're still using IAS2 for inventory valuation.


Thats my interpterpretation on it but i'm open to correction.

VERY CONFUSED NOW. AS PER IAS 8 (35) "A CHANGE IN THE MEASUREMENT BASIS APPLIED IS A CHANGE IN AN ACCOUNTING POLICY AND IS NOT A CHANGE IN AN ACCOUNTING ESTIMATE."

COULD SOMEONE PLEASE CLARIFY. GOING FROM FROM MEASURING INVENTORIES USING LIFO/FIFO TO RETAIL METHOD THIS IS A CHANGE IN MEASUREMENT BASIS?

NB: DERRY COTTER CASE BOOK PG 257 DARCY GROUP "A CHANGE FROM THE LIFO BASIS OF INVENTORY VALUATION TO THE FIFO BASIS IS THE CORRECTION OF AN ERROR".

V CONFUSED.

Choc Chip

I'd be happy enough treating a change from LIFO to FIFO as correction of an error.
You're not permitted to value inventory using LIFO under IAS 2 so the change to FIFO would be correction of the previously erroneous treatment.

I wouldn't worry about it - it'll prob be a tiny part of one indicator..

Jamesw2

Choc Chip wrote: »

I'd be happy enough treating a change from LIFO to FIFO as correction of an error.
You're not permitted to value inventory using LIFO under IAS 2 so the change to FIFO would be correction of the previously erroneous treatment.

I wouldn't worry about it - it'll prob be a tiny part of one indicator..

NOT GOOD ENOUGH. CHANGE FROM FIFO TO RETAIL METHOD HAS TO BE A CHANGE IN MEASUREMENT BASIS APPLIED THEREFORE POLICY CHANGE NOT CORRECTION OF ERROR. THERE HAS TO BE A CORRECT ANSWER (DOESN'T THERE!!!!!)

Choc Chip

Not good enough? Jees chill...

From a quick look at my notes I'd treat a change in FIFO to retail method (missed that in your post the first time) as a change in measurement basis under IAS 8.35 so a change in accounting policy.

Still stand by the fact that LIFO to FIFO could be correction of an error but I'm open to correction on that and the above.

Fiona44

So the standard says that "a change in measurement basis" is a change in accounting policy.

Then the sample solution given for simulation 1 in the auditing elective mock paper says: "The new system for determining the closing stock is attempting to approximate precisely the same result using a different estimation method. Hence it is NOT a change in accounting policy."

My understanding of the above (after giving it a bit of thought!) is that the measurement basis has not changed - ie. the inventory is still being MEASURED at the lower of cost and NRV in accordance with IAS 2. But the way that the cost is being ESTIMATED has changed - so a change from say weighted average would be a change in accounting estimate and not policy.

As regards a change from LIFO to FIFO, as LIFO is specifically disallowed this would be the correction of an error.

Nidot

Jamesw2 wrote: »

NOT GOOD ENOUGH. CHANGE FROM FIFO TO RETAIL METHOD HAS TO BE A CHANGE IN MEASUREMENT BASIS APPLIED THEREFORE POLICY CHANGE NOT CORRECTION OF ERROR. THERE HAS TO BE A CORRECT ANSWER (DOESN'T THERE!!!!!)

James, take a walk and come back when you're not going to be shouting at people using large text. This thread is for people looking to help eachother with FAE's, it's not after hours.

Jamesw2

Nidot wrote: »

James, take a walk and come back when you're not going to be shouting at people using large text. This thread is for people looking to help eachother with FAE's, it's not after hours.

Yes, apologies people. My keyboard had caps lock on, didnt realise. Not shouting. Just looking for right answer. Again, apologies.

Rickyroma

Fiona44 wrote: »

So the standard says that "a change in measurement basis" is a change in accounting policy.

Then the sample solution given for simulation 1 in the auditing elective mock paper says: "The new system for determining the closing stock is attempting to approximate precisely the same result using a different estimation method. Hence it is NOT a change in accounting policy."

My understanding of the above (after giving it a bit of thought!) is that the measurement basis has not changed - ie. the inventory is still being MEASURED at the lower of cost and NRV in accordance with IAS 2. But the way that the cost is being ESTIMATED has changed - so a change from say weighted average would be a change in accounting estimate and not policy.
As regards a change from LIFO to FIFO, as LIFO is specifically disallowed this would be the correction of an error.

This seems correct.

Ciara471

Apologies if it's been asked already but does anyone have a link for the tax rates for 2011 and the indexation tables? Can't find them anywhere

Choc Chip

Ciara471 wrote: »

Apologies if it's been asked already but does anyone have a link for the tax rates for 2011 and the indexation tables? Can't find them anywhere

all on revenue's site:

http://www.revenue.ie/en/tax/it/leaflets/it1.html has all the tax rates and

www.revenue.ie/en/tax/cgt/leaflets/cgt1.pdf

page 38 of the above leaflet has the indexation tables

Spoofer123

Hi All
Having done a lot of case studies at this stage I am now trying to sort out my notes that I need to bring into the exam.

So far I have done lists summarising the cases and each of the Super 6 which I will add to current class material, cases & solutions. I also plan on bringing some material from old FAE that I find useful. Books wise I am bringing the following:

· The ISA & IAS books (both tabbed to bejesus)
· The financial reporting cases & solution books,
· tax planning book
· resource pack
I know this might be a bit minimalistic for some considering I saw someone bring 2 wheelie bins worth of material last year.

Does anyone have any pointers for other material that might be useful for the exam?

Thanks

ahtfulal

Think you're right there spoofer, the less the better, bringing in too much stuff is a distraction more than anything. The main thing is understanding what's going down in the case and relating ur answer back to that particular case. This is the main skill they are looking for to pass these exams and one which cannot be found in any book!

Your right also about summarising super 6 in a folder, it's a good idea to whip this out for guidance.

Also thing it's important to note what indicators are being asked as you make ur journey through the cases. It seems likely that there will be 2 audit and 2 tax indicators over the 2 days. So at least if you spot these and answer them well you will get a nice buzz.

Business leadership is going to be the fly in the ointment!

Clanno

ahtfulal wrote: »

Think you're right there spoofer, the less the better, bringing in too much stuff is a distraction more than anything. The main thing is understanding what's going down in the case and relating ur answer back to that particular case. This is the main skill they are looking for to pass these exams and one which cannot be found in any book!

Your right also about summarising super 6 in a folder, it's a good idea to whip this out for guidance.

Also thing it's important to note what indicators are being asked as you make ur journey through the cases. It seems likely that there will be 2 audit and 2 tax indicators over the 2 days. So at least if you spot these and answer them well you will get a nice buzz.

Business leadership is going to be the fly in the ointment!

beginning to get a bit nervy, I would imagine it would be difficult to summarize the super 6 ... by any chance did anyone do the finance course with CGS any good?

Coldplayer

Fiona44 wrote: »

So the standard says that "a change in measurement basis" is a change in accounting policy.

Then the sample solution given for simulation 1 in the auditing elective mock paper says: "The new system for determining the closing stock is attempting to approximate precisely the same result using a different estimation method. Hence it is NOT a change in accounting policy."

My understanding of the above (after giving it a bit of thought!) is that the measurement basis has not changed - ie. the inventory is still being MEASURED at the lower of cost and NRV in accordance with IAS 2. But the way that the cost is being ESTIMATED has changed - so a change from say weighted average would be a change in accounting estimate and not policy.

As regards a change from LIFO to FIFO, as LIFO is specifically disallowed this would be the correction of an error.

that sounds right to me

Choc Chip

Fiona44 wrote: »

So the standard says that "a change in measurement basis" is a change in accounting policy.

Then the sample solution given for simulation 1 in the auditing elective mock paper says: "The new system for determining the closing stock is attempting to approximate precisely the same result using a different estimation method. Hence it is NOT a change in accounting policy."

My understanding of the above (after giving it a bit of thought!) is that the measurement basis has not changed - ie. the inventory is still being MEASURED at the lower of cost and NRV in accordance with IAS 2. But the way that the cost is being ESTIMATED has changed - so a change from say weighted average would be a change in accounting estimate and not policy.

As regards a change from LIFO to FIFO, as LIFO is specifically disallowed this would be the correction of an error.

While that sounds right and makes sense in the context of the solution the institute gave, a look on chariot throws up this example: http://www.charteredaccountants.ie/chariotindex/framegen2.asp?_u=asb_frs_18/36.html

which seems to suggest that a change in the method of valuing inventory is a change in measurement basis (though admittedly an FRS example). A look around on google is producing articles stating that the change is a change in measurement basis too.. Am I being completely stupid/ missing something entirely obvious or has the interpretation changed?

*beats head off wall*

Coldplayer

having looked up a few IFRS examples and notes, it is a change in measurement basis, therefore a change in accounting policy, one get out clause in the standard is that if you are ever unsure go with an estimate, i'd say if you argue your point a fair bit, take a plunge on an answer you should be fine