FAE September 2014

IR1SH RANG3R

womandriver wrote: »

Is there anyone from the audit elective around? Urgent question and the elective thread is dead.

I'm doing the audit elective, not sure how much help I'll be though? :P

womandriver

IR1SH RANG3R wrote: »

I'm doing the audit elective, not sure how much help I'll be though? :P

Hi, thanks, I've just noticed the addendum to the competency statement says that ISRE 2400 was revised in Sept 2012 and the new version is examinable (unless I'm reading the addendum wrong).

However Sean's notes still reference the old version.

Can you please tell me which version is in your student technical handbook?

I'm repeating so have last year's book.

Thanks.

womandriver

womandriver wrote: »

Hi, thanks, I've just noticed the addendum to the competency statement says that ISRE 2400 was revised in Sept 2012 and the new version is examinable (unless I'm reading the addendum wrong).

However Sean's notes still reference the old version.

Can you please tell me which version is in your student technical handbook?

I'm repeating so have last year's book.

Thanks.

It's highlighted in yellow on the last page, does yellow mean it's examinable?

According to the colour coding, yellow means change happened after 2012/2013 cut off, but what does that mean for 2013/2014?

IR1SH RANG3R

womandriver wrote: »

Hi, thanks, I've just noticed the addendum to the competency statement says that ISRE 2400 was revised in Sept 2012 and the new version is examinable (unless I'm reading the addendum wrong).

However Sean's notes still reference the old version.

Can you please tell me which version is in your student technical handbook?

I'm repeating so have last year's book.

Thanks.

Hmmm the one in the technical handbook makes no reference to being revised in 2012 and says it is applicable for all periods beginning on or after December 15, 2006? Usually it says at the top if they were revised so find this odd

IR1SH RANG3R

I assume the new version is not examinable. If you look at all the IAS/IFRS highlighted in yellow they specifically state that all amendments to the cut-off are examinable. I assume the new ISRE 2400 is not examinable as it doesn't seem to be the updated one in the student technical handbook?

womandriver

IR1SH RANG3R wrote: »

Hmmm the one in the technical handbook makes no reference to being revised in 2012 and says it is applicable for all periods beginning on or after December 15, 2006? Usually it says at the top if they were revised so find this odd

Yeah, that's same a mine so.

But when I went to Chariot, the revised version is 53 pages long and completely different.

Maybe the addendum is not saying the revised version is examinable, it's highlighted in yellow but I can't figure out what it means.

I'll have another look.

womandriver

IR1SH RANG3R wrote: »

I assume the new version is not examinable. If you look at all the IAS/IFRS highlighted in yellow they specifically state that all amendments to the cut-off are examinable. I assume the new ISRE 2400 is not examinable as it doesn't seem to be the updated one in the student technical handbook?

Yeah that must be it, got a fright when I seen it. I checked next year's addendum and it's green on that so maybe not examinable till next year.

Thanks.

IR1SH RANG3R

womandriver wrote: »

Yeah that must be it, got a fright when I seen it. I checked next year's addendum and it's green on that so maybe not examinable till next year.

Thanks.

No worries Take a break, it's Friday night :P

womandriver

IR1SH RANG3R wrote: »

No worries Take a break, it's Friday night :P

Panic has officially washed over me :eek:

Thanks a mill, yes, I do need a break

Mark1916

Guys anyone looking for a bit of financial reporting questions which are decent could do a lot worse than going over the section 3 AAFRP questions, if only I could do it again tomorrow!!!

littlemiss123

Mark1916 wrote: »

Guys anyone looking for a bit of financial reporting questions which are decent could do a lot worse than going over the section 3 AAFRP questions, if only I could do it again tomorrow!!!

Think I might chance this tomorrow and give another skim over Derry's notes. Reached that sheer panic stage where I feel like I've learnt nothing over the last few months and am completely unprepared

Mark1916

littlemiss123 wrote: »

Think I might chance this tomorrow and give another skim over Derry's notes. Reached that sheer panic stage where I feel like I've learnt nothing over the last few months and am completely unprepared

Ah everyone is in the same boat, just need to keep the head between now and Tuesday! I'll not be putting in any mad hours as it's a necessity to be fresh as a daisy the morning of the exams! Today going to go over some management and financial tomorrow some Tax and audit and Monday some BL roughly spending 3-4 hours today!

maninblack

How long is the CAI website down today? Wanted to run through the 2014 mock papers and forgot to bloody print them off until now.

Anyone have them downloaded who could stick them on here?

Dellboy2007

maninblack wrote: »

How long is the CAI website down today? Wanted to run through the 2014 mock papers and forgot to bloody print them off until now.

Anyone have them downloaded who could stick them on here?

Here's the solutions if they are any good to you:

https://www.dropbox.com/s/b8cd2bb203r5pl5/FAE%20Core%20Comprehensive%20Mock%202014%20Suggested%20Solution%20FINAL.pdf?dl=0


https://www.dropbox.com/s/1z28gkh7klys04d/FAE%20Core%20Simulation%20Mock%202014%20Suggested%20Solution%20FINAL.pdf?dl=0

Let me know if you want the Audit elective

maninblack

Dellboy2007 wrote: »

Here's the solutions if they are any good to you:

https://www.dropbox.com/s/b8cd2bb203r5pl5/FAE%20Core%20Comprehensive%20Mock%202014%20Suggested%20Solution%20FINAL.pdf?dl=0


https://www.dropbox.com/s/1z28gkh7klys04d/FAE%20Core%20Simulation%20Mock%202014%20Suggested%20Solution%20FINAL.pdf?dl=0

Let me know if you want the Audit elective

Sound for that, no you're fine I'm doing tax but only needed the core in any case. Cheers!

CW1989

Dellboy2007 would you be able to sent me the following elective questions, please? Forgot the site was down today

Castleford Credit Union
Marshall Limited
Bake It Limited
Sparkling Limited

Dellboy2007

CW1989 wrote: »

Dellboy2007 would you be able to sent me the following elective questions, please? Forgot the site was down today

Castleford Credit Union
Marshall Limited
Bake It Limited
Sparkling Limited

Hey, try one of these folders, can't remember which one. Let me know if it's not there I'll try again:

https://www.dropbox.com/s/jol2p0m8h3tognc/FAE%20AAE%20-%20Solutions%20to%20cases%20-%20session%206%20to%209.zip?dl=0

https://www.dropbox.com/s/9a7xz0579gzw71n/FAE%20AAE%20ROI.zip?dl=0

littlemiss123

maninblack wrote: »

How long is the CAI website down today? Wanted to run through the 2014 mock papers and forgot to bloody print them off until now.

Anyone have them downloaded who could stick them on here?

Website is only down till half 1

maninblack

The FR adjustments on our mock are completely insane O_O

It's not just me I assume? Like, looking at this marking scheme, I wouldn't even come close to RC if this was what they expected next Tuesday

jaybeeveedub

Quick deferred tax question.....?

When an investment property is revalued, the gain is taken to P/L....

This will increase corp tax payable for the year....

Why does this not affect the Deferred Tax charge?

Not a tall

jaybeeveedub wrote: »

Quick deferred tax question.....?

When an investment property is revalued, the gain is taken to P/L....

This will increase corp tax payable for the year....

Why does this not affect the Deferred Tax charge?

I think its the other way around - no increase in the Payable but there is DT.

No tax will be paid until the property is sold and the gain is realised. There will be no tax payable this year (so no increase in the payable), but there will be a deferred tax liability (since you are recording a gain)

IR1SH RANG3R

Stupid cases! Can someone tell me why in Glabal Tech they say that an asset based valuation is more suitable as the company has valuable IP whereas in the Comp 2012 exam paper they say that an asset based valuation is not suitable for a technology company with valuable IP and use an earnings multiple approach?

Seems to me to be very contradictory and is annoying me now!

TheDoctor

How is everyone relaxing this weekend before the exams?

littlemiss123

IR1SH RANG3R wrote: »

Stupid cases! Can someone tell me why in Glabal Tech they say that an asset based valuation is more suitable as the company has valuable IP whereas in the Comp 2012 exam paper they say that an asset based valuation is not suitable for a technology company with valuable IP and use an earnings multiple approach?

Seems to me to be very contradictory and is annoying me now!

I spotted this last night!! What a joke!

IR1SH RANG3R

littlemiss123 wrote: »

I spotted this last night!! What a joke!

I got way too frustrated at the case book when I read it :P The only thing I can think of is that in Glabaltech that the company we are valuing is not fully utilising the IP so the earnings will not reflect this aspect of the company. As far as I remember the comp 2012 the company was fully utilising its IP so the earnings would reflect this. Not sure if that's even right but don't care at this stage!

It's just stupid that they outright state in separate cases that this way is not suitable for valuing the company and do it in another case

jaybeeveedub

Not a tall wrote: »

I think its the other way around - no increase in the Payable but there is DT.

No tax will be paid until the property is sold and the gain is realised. There will be no tax payable this year (so no increase in the payable), but there will be a deferred tax liability (since you are recording a gain)

I get that the Capital Gain will occur at some point in the future,

say Cost 20M, Revalued to 40M, deferred Tax liability of 20M @ 33%

but that 20M has been brought to the P/L per IAS40, meaning we will pay CT of 20M @ 12.5% for the year in question no?

Dellboy2007

IR1SH RANG3R wrote: »

I got way too frustrated at the case book when I read it :P The only thing I can think of is that in Glabaltech that the company we are valuing is not fully utilising the IP so the earnings will not reflect this aspect of the company. As far as I remember the comp 2012 the company was fully utilising its IP so the earnings would reflect this. Not sure if that's even right but don't care at this stage!

It's just stupid that they outright state in separate cases that this way is not suitable for valuing the company and do it in another case

If you are given comparable industry multiples use them for revenue/earnings based (market based approach).

Keep in mind that some companies that are being acquired are private and so will have to be discounted.

Otherwise use the asset based/cost based/replacement cost.

littlemiss123

jaybeeveedub wrote: »

I get that the Capital Gain will occur at some point in the future,

say Cost 20M, Revalued to 40M, deferred Tax liability of 20M @ 33%

but that 20M has been brought to the P/L per IAS40, meaning we will pay CT of 20M @ 12.5% for the year in question no?

Remember, accounting profits are not the same as tax profits. You do not take the bottom line of your SOCI as you taxable profit, you complete a separate tax comp with addbacks/deductions etc. So in the tax comp the 20m will be added back in computing taxable profits.

littlemiss123

IR1SH RANG3R wrote: »

I got way too frustrated at the case book when I read it :P The only thing I can think of is that in Glabaltech that the company we are valuing is not fully utilising the IP so the earnings will not reflect this aspect of the company. As far as I remember the comp 2012 the company was fully utilising its IP so the earnings would reflect this. Not sure if that's even right but don't care at this stage!

It's just stupid that they outright state in separate cases that this way is not suitable for valuing the company and do it in another case

I know, it really grated me when I read it. I came to the same conclusion as you anyway, one of the companies wasn't utlilising the IP so an earnings based valuation isn't too appropriate for them as all the value is still on the SOFP.

Regardless, if we are asked a valuation I will always calculated an asset based valuation as this should act as a floor valuation i.e. the consideration/value shouldn't be less than its aggregate assets.

IR1SH RANG3R

Dellboy2007 wrote: »

If you are given comparable industry multiples use them for revenue/earnings based (market based approach).

Keep in mind that some companies that are being acquired are private and so will have to be discounted.

Otherwise use the asset based/cost based/replacement cost.

I get that, but you're given both in both cases

jaybeeveedub

littlemiss123 wrote: »

Remember, accounting profits are not the same as tax profits. You do not take the bottom line of your SOCI as you taxable profit, you complete a separate tax comp with addbacks/deductions etc. So in the tax comp the 20m will be added back in computing taxable profits.

facepalm

barbie_j

think the 3 sims on 2012 sim paper were really hard compare to other years'. I took the indicators Completely Wrong! anyone on the same boat??

littlemiss123

jaybeeveedub wrote: »

facepalm

Had a few of these moments myself over the last few days.

It's like the same principle as drinking yourself sober...I'm studying myself stupid

littlemiss123

barbie_j wrote: »

think the 3 sims on 2012 sim paper were really hard compare to other years'. I took the indicators Completely Wrong! anyone on the same boat??

I thought the 2012 sims were tricky alright.

Dellboy2007

IR1SH RANG3R wrote: »

I get that, but you're given both in both cases

Just had a look there. For the gtp one, their patent was not reflected in their earnings so an asset based was more suitable.

barbie_j

Dellboy2007 wrote: »

Just had a look there. For the gtp one, their patent was not reflected in their earnings so an asset based was more suitable.

I remembered that assets based valuation always gave the lowest value as it excluded intangible assets, hence I used it as the floor and expected the others are higher than this. did that global tec question, and the other one on the core, confused

but i think you are right, it depends on the intangible, like if has been fully utilised, then earnings method could be better, if not,pick the assets based .

Just in general, you include intangible assets in assets based valuation?

littlemiss123

barbie_j wrote: »

I remembered that assets based valuation always gave the lowest value as it excluded intangible assets, hence I used it as the floor and expected the others are higher than this. did that global tec question, and the other one on the core, confused

but i think you are right, it depends on the intangible, like if has been fully utilised, then earnings method could be better, if not,pick the assets based .

Just in general, you include intangible assets in assets based valuation?

As far as I remember you can include anything that is separately identifiable and can be isolated and sold! Thats why goodwill is never included as you can't sell the goodwill of the business, whereas an exclusive license could be (depending on type etc) sold off separately.

barbie_j

littlemiss123 wrote: »

As far as I remember you can include anything that is separately identifiable and can be isolated and sold! Thats why goodwill is never included as you can't sell the goodwill of the business, whereas an exclusive license could be (depending on type etc) sold off separately.

thank you littlemiss!

barbie_j

a quick question in Tax, thought ' terminal loss relief' is only available for sole traders who considers incorporation.

so say, if company A wants to sell a building, the company can't avail ' terminal loss relief'.

but sim 2 2012 paper said' the sale of the building precipitates a cessation of the trade and so the terminal loss provisions should be considered'.- clearly the building belongs to a company, not the sole trader.

very confused.

any help is appreciated!

maninblack

OK, allow me to ask a stupid question here.

Is there deferred tax consequences for ANY revaluation event?

Take this for example:

• Co XYZ bought a machine 2 year ago for 1,000, depreciated over 10 years.
• After 2 years, the van was said to be worth 900
• Gain of 100, happy days

Now - does this mean straight away alarm bells should be going off in my head that I need to put through a DT Asset/Liab adjustment when I'm altering the original 'plan' if you will, to write this thing off over 10 yrs?

And what about impairments etc? What are the rules?

Sorry, I know this is baby stuff prob, IAS 12 has just always caused me misery

ashmcg9

Does anyone else feel like they are totally unprepared for this exam? I have done most of the case studies and maybe 3-4 cases under exam pressure but I still don't feel prepared. I work in a smaller firm and just had six weeks study leave so went straight into doing cases and haven't spent much time looking over technical material. I'm still also missing some indicators when I do case studies. Do you think that they will make this year's exam much harder given that it's their fourth year running it? Or do you think they will have to make it a bit easier given the bad AAFRP results? I'm really worried about my timing aswell because I am a slow writer. Just really can't wait until these exams are over

Not a tall

barbie_j wrote: »

a quick question in Tax, thought ' terminal loss relief' is only available for sole traders who considers incorporation.

so say, if company A wants to sell a building, the company can't avail ' terminal loss relief'.

but sim 2 2012 paper said' the sale of the building precipitates a cessation of the trade and so the terminal loss provisions should be considered'.- clearly the building belongs to a company, not the sole trader.

very confused.

any help is appreciated!

Terminal loss relief is available for companies as well (s397 TCA). Rules are similar - a loss in the last 12 months can be offset against profits of the 3 years up to cessation

littlemiss123

barbie_j wrote: »

a quick question in Tax, thought ' terminal loss relief' is only available for sole traders who considers incorporation.

so say, if company A wants to sell a building, the company can't avail ' terminal loss relief'.

but sim 2 2012 paper said' the sale of the building precipitates a cessation of the trade and so the terminal loss provisions should be considered'.- clearly the building belongs to a company, not the sole trader.

very confused.

any help is appreciated!

Just had a quick look at this. You are right, terminal loss relief is only available on the termination of a trade (be it through liquidation, sale of assets or incorporation). I think that is just poor wording of the solution. The sale of the building is part of what will eventually be the sale of the entire trade by parts, and therefore terminal loss relief will apply.

littlemiss123

maninblack wrote: »

OK, allow me to ask a stupid question here.

Is there deferred tax consequences for ANY revaluation event?

Take this for example:

• Co XYZ bought a machine 2 year ago for 1,000, depreciated over 10 years.
• After 2 years, the van was said to be worth 900
• Gain of 100, happy days

Now - does this mean straight away alarm bells should be going off in my head that I need to put through a DT Asset/Liab adjustment when I'm altering the original 'plan' if you will, to write this thing off over 10 yrs?

And what about impairments etc? What are the rules?

Sorry, I know this is baby stuff prob, IAS 12 has just always caused me misery

It will depend on what the tax written down value of the asset is. If the TWDV is also 800 (i.e. 1,000 after 2 years depn) then there is a gain of 100 and you will have to recognise a deferred tax liability. However if the TWDV is 900, then you would not recognise a liability.

IR1SH RANG3R

How are people using the PQA? Is it just the audit work programmes for different areas? Don't want to print off the whole thing if I don't need it and if it'll take me a long time to find something in the exam

barbie_j

littlemiss123 wrote: »

Just had a quick look at this. You are right, terminal loss relief is only available on the termination of a trade (be it through liquidation, sale of assets or incorporation). I think that is just poor wording of the solution. The sale of the building is part of what will eventually be the sale of the entire trade by parts, and therefore terminal loss relief will apply.

Thanks litttlemiss!
i just checked revenue.ie and went back to the book.

say in that sim question, that day spa thing is not a trade, it is a Company.
For a company, no matter how they ceased trading, they Can't avail of the Termination loss relief.

I decided to let this part go :P thank God I wasn't sitting the 2012 exam..

House of Wolves

barbie_j wrote: »

Thanks litttlemiss!
i just checked revenue.ie and went back to the book.

say in that sim question, that day spa thing is not a trade, it is a Company.
For a company, no matter how they ceased trading, they Can't avail of the Termination loss relief.

I decided to let this part go :P thank God I wasn't sitting the 2012 exam..

If it was a seperate company carrying on the spa trade, it would still have its trade, and therefore be entitled to terminal loss relief under S.397 once it ceases to trade. See page 310 of the cap2 book (version from last year). its non trade period would then be from the cessation date to the appointment of the liquidator.

There is terminal loss relief for both a company and a sole trader. (pg.21 of the cap2 book for the sole trader).

Philip1988

Has anybody any good templates for Memos, etc

vnervous

Feeling so defeated

IR1SH RANG3R

Philip1988 wrote: »

Has anybody any good templates for Memos, etc

I just took a couple of examples from previous exam papers, if you wanna PM me your email I can scan them and shoot them on to you?