FAE September 2012

Accrual Intentions

Elvis2012 wrote: »

Can someone please list all the BL indicators over the two Core days. And if you could give an idea of whats points should have been covered. Very worried about BL. Thanks.

This is just my take on it and I am open to correction but I felt there were 5 BL indicators over the two days.

Comp:
1. Strategy - Strategic fit of the acquisition company.
2. Marketing - Putting in place a formal marketing plan/advantages of segmenting.

Sims:
3. Change Management - How to staff an Implementation Team.
4. HR - Redundancies/Outline a communication policy.
5. Ethics - Director willfully not paying over PAYE to the Revenue.

chursy

i never got this! i am a repeater as wel!! clearly not rolled out to everyone.

Pawwed Rig

Feedback completed - Slated everything:D

ferike1

You see, because I am a cynic I just think that if you slate everything the institute will just go sour grapes. You did the exam so you can't see it objectively. Really hope I am wrong

FAE Freddie

I agree. Slating everything won't go down well 'cause realistically some things are fine.

Pawwed Rig

Maybe so. There is not much I could give positive feedback on given the last 3 months or so. I spent 2 weeks solid studying Financial Reporting Standards as that was my weakest subject in CAP2. 1 standard on the exam.

I thought the lectures in general were not upto much. Every education study ever produced will tell you that a six hour lecture is a complete waste of time. Even the Change Mgt lecturer said so. If you look at the streamed lecture for Change management and go into 1 hr and 21 minutes and watch for 1 minute. It is the Dublin lecture, not sure what other people have access to.
If the lecturers even know what a waste of time it is how come the Institute persist.

Most of the people I went to college with did ACCA. They are all qualified already. Some failed one or more exams but repeated and passed the second or third time around. I am not sure the all or nothing of the FAE suits me

All of the data will be compiled together anyway so the neagative and positive feedback will be seperated. So even if slated it will just go into the negative feedback pile

FAE Freddie

I most be the only one going to lectures where there's a coffee break every 1.5 hours and a lunch break in the middle of the day so...

The exams were tough and I'd say I'm borderline in Core. But pretty much everything that Paul Monahan et al said has come to pass.

- It's not a technical exam in the way CAP2 is

- Business Leadership and making recommedations is key

- You can't transcribe preprepared answers

- IMP was taken up a notch

- Management accounting was on

As for the lack of "pure" FR, sure the AAFRP is one indicator and effectively part of the exam. It's obviously covering a lot of the FR stuff.

ferike1

I agree with most points.

Not meaning to be a buzzkill but there was more than one IFRS standard on the exam (were you exaggerating??). I do agree on the point you are making that very little of our overall knowledge.

Also accas are far more straightforward. I don't mind case studies but the lack of clarification on what is being asked is a nightmare. You are required to hit indicators a certain amount of times which means despite what the institute say, don't take a silo approach, it is impossible as you must get tax x times, audit x times etc. If you don't know what you are answering you don't know where to improve.
They can use case studies but the lack of questions is so stupid. In any practical workplace you can clarify exactly what anyone wants. Its not some big secret. If you missed something you can ask your manager and if he is in any way normal will tell you.

And the biggest stinger for me is that ACCA exams are separate. You pass one, it stays passed. How ridiculous is it that here you can be competent in finance one year and fail in PM and then fail in finance the next year. That is unfair. Simple as.

The reason APM was more straightforward than core was because you knew what was coming. APM! In core its everything and the kitchen sink.

My final point is that I could have done these exams 1,2,3 or any amount of weeks ago and it wouldn't have made a difference. More study =/= higher chance of success like it would in any normal exam.

Pawwed Rig

For those who cannot or can't stomach logging onto ICAI website so soon I will quote
Bear in mind this is 80 minutes into a 4.5 hour lecture

"I have got the best of you from the day, from here on it's downhill. Frankly it is an act of madness for anyone to think that you can learn sitting for 6 hours. It is an act of complete insanity. Every piece of psychology I have ever learned about education says No. this is the most efficent ineffective way to transmit information. So you're suffering with a poor system"

Now I thought that was a very damning assessment of the whole structure of the courses.

Accrual Intentions

I tried to be as specific as I could but was struggling to remember specific questions and problems. What I complained about was:

1. Length and layout of Comp
2. Arbitrary nature of HR and Change Management indicators - I've since went through the material and another 4-5 hours on these indicators in the exam still wouldn't have made a difference since there is very little about these areas in the material - all came down to the individuals imagination.
3. The Comp was much too IMP centric in general as well as too much computer jargon to get your head round.

ferike1

Stick to the case study. That is fine. But why not have like subjects spread out more. Have one exam covering IT, BL and mgmt accounting and one exam covering tax, finance, audit and financial accounting.
At least that way prep would be easier as you know what you are looking for. Also as accountants strategy I can understand as something that is important but IT, Change management (which is waffle to the nth degree), HR and Marketing are stupid. Sure even in the exams we stated that it was a bad idea to have the finance and HR director as one person....so why is it expected of us?

As a future CFO you wouldn't deal with any of that ****, except from a financial perspective.

JAKE11

Anyone else think that it was hard to know the scope of what was expected with respect to financial reporting standards in cases? And how did people identify what the FR indicators were?

The only clear FR indicator was the core comp where it was necessary to review the treatment of deferred development costs. This was sensible enough I thought.

The other indicator about acquistion costs and related costs for capitalisation was difficult because it involved dealing with the individual accounts and then the consolidation of the group accounts. The query was about having the least impact on profits. But would this be profits of the group or the parents individual accounts or subsidiary individual accounts?. I may have interpreted this wrong but I felt it was kinda tricky to determine where to start and and how to put together a good answer to address the query.

In Mandalay case was it necessary to deal IFRS5 and were we required to deal implcations within group accounts and individual accounts. Would indicative jnls and disclosures be required?

Accrual Intentions

JAKE11 wrote: »

Anyone else think that it was hard to know the scope of what was expected with respect to financial reporting standards in cases? And how did people identify what the FR indicators were?

The only clear FR indicator was the core comp where it was necessary to review the treatment of deferred development costs. This was sensible enough I thought.

The other indicator about acquistion costs and related costs for capitalisation was difficult because it involved dealing with the individual accounts and then the consolidation of the group accounts. The query was about having the least impact on profits. But would this be profits of the group or the parents individual accounts or subsidiary individual accounts?. I may have interpreted this wrong but I felt it was kinda tricky to determine where to start and and how to put together a good answer to address the query.

In Mandalay case was it necessary to deal IFRS5 and were we required to deal implcations within group accounts and individual accounts. Would indicative jnls and disclosures be required?

I think that's still being debated. Some people felt this was an indicator, others didn't. I guess we won't fully know until the results/board report.

Scuba_Steve84

I assumed it was IFRS 5, i was completely stumped as to what the financial implications of selling the business were. All I could think of was tax, ifrs 5 then the infamous communication strategy

Szewinska

the subjectivity of this is highly worrying

ferike1

Scuba_Steve84 wrote: »

I assumed it was IFRS 5, i was completely stumped as to what the financial implications of selling the business were. All I could think of was tax, ifrs 5 then the infamous communication strategy

Yeah financial can mean financial accounting or finance or both? Is it two indicators or what :pac:

upnorthchick

nothing we can do now lads! just forget it - your just putting your heads away. best of luck to you all - im signing off boards

Scuba_Steve84

ferike1 wrote: »

Yeah financial can mean financial accounting or finance or both? Is it two indicators or what :pac:

I hope it can mean both! IFRS 5 was definately applicable though so i'd be well browned off if that wasn't what they wanted. I couldn't see any finance aspects to it at all, though happy to be corrected if anybody else did?

Accrual Intentions

Scuba_Steve84 wrote: »

I hope it can mean both! IFRS 5 was definately applicable though so i'd be well browned off if that wasn't what they wanted. I couldn't see any finance aspects to it at all, though happy to be corrected if anybody else did?

I agree IFRS 5 could definitely have applied. But if it wasn't a finance indicator then would that mean there would only have been one finance indicator across the two papers? Which obviously couldn't have happened.

Eiriu

Did anyone put in any separate ethic indicators in the core, or sims.

I know that it was necessary to mention that the mandalay employees needed to be kept on but was there anything else?

ferike1

Isn't ethics part of BL?

Like if you get enough HR, Change, Marketing and Strategy then ethics is less important?

Eiriu

Scuba_Steve84 wrote: »

I assumed it was IFRS 5, i was completely stumped as to what the financial implications of selling the business were. All I could think of was tax, ifrs 5 then the infamous communication strategy

I thought the finance side of this was working out how much money you could realize on liquidation, seeing that the company was essentially illiquid and there would not be enough assets to pay its creditors . Therefore advice to accept the share sale offer of 700,000 to take this liability off your books.

The finance element was calculating how much cash could be realised by asset sale.

In relation to tax- it was pointed out in case that the manadalay company had made losses for a number of years. Someone told me that the indicator here was losses forward. But would the losses in previous years not have been grouped against the other companies in the groups profits? Thus the issue was that the groups effective rate of tax would increase for remaining companies in future years?

Eiriu

ferike1 wrote: »

Isn't ethics part of BL?

Like if you get enough HR, Change, Marketing and Strategy then ethics is less important?

What exactly were the HR indicators?

ferike1

Well the communication one could be HR or change depending on the slant.

JAKE11

Eiriu wrote: »

I thought the finance side of this was working out how much money you could realize on liquidation, seeing that the company was essentially illiquid and there would not be enough assets to pay its creditors . Therefore advice to accept the share sale offer of 700,000 to take this liability off your books.

The finance element was calculating how much cash could be realised by asset sale.

In relation to tax- it was pointed out in case that the manadalay company had made losses for a number of years. Someone told me that the indicator here was losses forward. But would the losses in previous years not have been grouped against the other companies in the groups profits? Thus the issue was that the groups effective rate of tax would increase for remaining companies in future years?

I thought that the sale of the premises at 21m (which was €6m approx above NBV) would convert the building NBV of €15m into cash of €21m resulting in an increase in net assets/equity of the company from negative €3m to positive €2.25m (after CGT liability of €0.75m). On this basis I said that the asset sale should be pursued as International Business Locators were, in effect, undervaluing the premises in their offer.

Eiriu

Was there not trade creditors of 1.9 million that needed to be paid , an overdraft , and a loan of over 18milllion. On the basis that you would only realise 50% on sale of equipment and stock, due to fire sale I calculated that you would be left with negative 300,000 after CGT from asset sale.

FAE Freddie

Eiriu wrote: »

Was there not trade creditors of 1.9 million that needed to be paid , an overdraft , and a loan of over 18milllion. On the basis that you would only realise 50% on sale of equipment and stock, due to fire sale I calculated that you would be left with negative 300,000 after CGT from asset sale.

Possibly a silly question, but how do you deal with the negative reserves?

I recommended the €700k offer for the company as it was more than it was worth even if the building was valued at €20.25m (MV less CGT) and a much better result than a liquidation/asset sale.

Scuba_Steve84

Eiriu wrote: »

I thought the finance side of this was working out how much money you could realize on liquidation, seeing that the company was essentially illiquid and there would not be enough assets to pay its creditors . Therefore advice to accept the share sale offer of 700,000 to take this liability off your books.

The finance element was calculating how much cash could be realised by asset sale.

In relation to tax- it was pointed out in case that the manadalay company had made losses for a number of years. Someone told me that the indicator here was losses forward. But would the losses in previous years not have been grouped against the other companies in the groups profits? Thus the issue was that the groups effective rate of tax would increase for remaining companies in future years?

Eugh the more i think of this case the more i think i may of screwed it up! I did mention that the share sale was better, as if they sold the building, they'd have to pay tax on the gain, and out of the money left after this it wouldn't be enough to pay off all debts, whereas the sale of the shares would leave them liability free and cash positive. If that is the finance indicator though it's an extremely tame on!

I was doing the paper in NI, and thought most of the tax indicator was that they qualified for substantial shareholding exemption if they sold the shares so it was tax free income. i wrote down in my planning that the lower rate and higher rate bands would move after selling mandalay, but forgot to put it in the actual answer! Damn!

The few of us here though have all slightly different answers, imagine how many different interpretations there have been of it by everyone sitting!

FAE Freddie

Scuba_Steve84 wrote: »

Eiriu wrote: »

I thought the finance side of this was working out how much money you could realize on liquidation, seeing that the company was essentially illiquid and there would not be enough assets to pay its creditors . Therefore advice to accept the share sale offer of 700,000 to take this liability off your books.

The finance element was calculating how much cash could be realised by asset sale.

In relation to tax- it was pointed out in case that the manadalay company had made losses for a number of years. Someone told me that the indicator here was losses forward. But would the losses in previous years not have been grouped against the other companies in the groups profits? Thus the issue was that the groups effective rate of tax would increase for remaining companies in future years?

Eugh the more i think of this case the more i think i may of screwed it up! I did mention that the share sale was better, as if they sold the building, they'd have to pay tax on the gain, and out of the money left after this it wouldn't be enough to pay off all debts, whereas the sale of the shares would leave them liability free and cash positive. If that is the finance indicator though it's an extremely tame on!

I was doing the paper in NI, and thought most of the tax indicator was that they qualified for substantial shareholding exemption if they sold the shares so it was tax free income. i wrote down in my planning that the lower rate and higher rate bands would move after selling mandalay, but forgot to put it in the actual answer! Damn!

The few of us here though have all slightly different answers, imagine how many different interpretations there have been of it by everyone sitting!

If you wrote your planning in the answer book rough work, you'll get credit for it.

The ROI exam was different as the participation exemption (our equivalent) didn't apply to the share sale.

Scuba_Steve84

nope, just done it on my own file block like an idiot