FAE 2017

james83

Qwert6 wrote: »

When I looked back on it now I'm actually laughing at how the feck did I think it would be an operating lease for 50years 😂 But I'm pretty sure disclosure and journals are correct so let's pray they will be nice to us!!

just got a manager in works opinion on the leasing question and his opinion was that it a finance lease issue that needed to be dealt with but he said there is valid ground to argue it could be an operating lease...this is a big grey area in accounting and open to interpretation, i would imagine this will blow up into a big issue and candidates awarded C for both approaches

james83

Qwert6 wrote: »

They're impossible. They are HHHC in my opinion. I didn't even get to finish comp paper!

so unrealistic, bullet points with specific points was my strategy this week, the time pressure is too extreme

Qwert6

james83 wrote: »

just got a manager in works opinion on the leasing question and his opinion was that it a finance lease issue that needed to be dealt with but he said there is valid ground to argue it could be an operating lease...this is a big grey area in accounting and open to interpretation, i would imagine this will blow up into a big issue and candidates awarded C for both approaches

Ok sweet as that's really good to know! Thanks for that I think I can put my mind at ease until October anyway and worry then if I have to. Time to just focus on elective...

MrSzyslak

They didn't give a useful life for the property or an interest rate to calculate PV of MLP or put in the usual option to extend the lease at nominal value. I think this is what threw people. As risk and rewards of ownership was not clearly outlined as it usually would be.

There is also a solution for a sale and lease back for a car park in the Rocket case of the Derry Cotter book that results in an operating lease over 50 years. which as it is to Land , has a infinite life and therefore results in an operating sale and lease back transaction. So could be argued a substantial amount of the premises value was made up of land?

I gave both solutions which would probably looks stupid but needed it on paper to try get another C in FR. Was worried about negative marking of "sitting on the fence" but given the confusion I should be okay I hope.

madhouse2

What do you think is the min to get Bc in the core?

John.burke

Guys, at the end of the day it's a test of competence. Therefore you can't reach C if you've incorrectly understated the sofp to the tune of 7mil. Also, deciding to amortise is also an illustration of competence. Disclosure will be used to determine HC . Anything else will be clutching at straws I feel

Jsmac67

There was also no FV given in the question so it was impossible to determine what the lower of minimum lease payments and FV was for recognition.

All round mess of an indicator.

Qwert6

Jsmac67 wrote: »

There was also no FV given in the question so it was impossible to determine what the lower of minimum lease payments and FV was for recognition.

All round mess of an indicator.

Agreed. Open to interpretation. Hopefully it will be Cs all round. Just praying the the confusion will mean they will mark it nice.

Qwert6

MrSzyslak wrote: »

They didn't give a useful life for the property or an interest rate to calculate PV of MLP or put in the usual option to extend the lease at nominal value. I think this is what threw people. As risk and rewards of ownership was not clearly outlined as it usually would be.

There is also a solution for a sale and lease back for a car park in the Rocket case of the Derry Cotter book that results in an operating lease over 50 years. which as it is to Land , has a infinite life and therefore results in an operating sale and lease back transaction. So could be argued a substantial amount of the premises value was made up of land?

I gave both solutions which would probably looks stupid but needed it on paper to try get another C in FR. Was worried about negative marking of "sitting on the fence" but given the confusion I should be okay I hope.

Yes it wasn't clear at all once my opinion. Let's hope we can get across the line with C on it.

unknown1990

I don't think it was made clear that the lease obligation arose on the 31st of July or from first of August making it an obligation in the following year's accounts. That's the impression I took from it. Also we didn't know the discount rate to determine if the fair value or the present value of the market minimum lease payments was lower. More than likely it was the 7 million but it's impossible to know if the 7 million equated fair value or was just an offer received in the market which I don't think is the same. If payments were to commence from 1 August I would think no lease obligation existed in the 2017 accounts. To be honest I think we're over complicating it here. What the key point was to make was that the gain had to be in a deferred income account and released to the sploci over 50 years and couldn't be fully recognised in 2017. Also there's no negative marking so if you answered for a finance and operating lease I'd say it's fine. It was a very poorly worded indicator but I think it was actually less complicated than we're assuming here.

John.burke

Did everyone treat the credit control issue as a blended BL/Finance indicator? Seems obvious enough to me the time. I'm assuming Swot + business plan is one BL indicator too

chazzy100

John.burke wrote: »

Did everyone treat the credit control issue as a blended BL/Finance indicator? Seems obvious enough to me the time. I'm assuming Swot + business plan is one BL indicator too

SWOT and business plan were separate indicators.

CAIBoyz

John.burke wrote: »

Did everyone treat the credit control issue as a blended BL/Finance indicator? Seems obvious enough to me the time. I'm assuming Swot + business plan is one BL indicator too

If they were together where was the 4th indicator in sim 2?

John.burke

chazzy100 wrote: »

SWOT and business plan were separate indicators.

Very unlikely. Business plan requirement was generic with swot been specific. Both had to be submitted to bank. No way are they giving 25 min to list details of a generic business plan. Just my opinion

John.burke

CAIBoyz wrote: »

If they were together where was the 4th indicator in sim 2?[/quote

Poor credit control is evidence of a poor organisational structure. 7 indicators across the 2 sims

John.burke

Jsmac67 wrote: »

There was also no FV given in the question so it was impossible to determine what the lower of minimum lease payments and FV was for recognition.

All round mess of an indicator.

No fv ? a 3rd part paid 7 mil for the asset in the open market! This represents fv

Humour Me

Sim 1
Audit of receivables Audit
Provisions FR
Credit control Finance
Sale and Leaseback FR

Sim 2
Business Plan BL
SWOT BL
R&D expenditure Tax
Target costing MA

AtticusFinch86

The Swot and Business plan were definitely separate BL indicators. You were asked to explain what a BP was and guide them on what needs to be included, that's well over a page of narrative at least. You were also asked to explain the SWOT and give them a detailed SWOT analysis (meaning a bullet point list won't suffice)


The credit management one was a single finance indicator.

AtticusFinch86

John.burke wrote: »

CAIBoyz wrote: »

If they were together where was the 4th indicator in sim 2?[/quote

Poor credit control is evidence of a poor organisational structure. 7 indicators across the 2 sims

There were 8 indicators across. Pretty sure Paul Monaghan said the structure was going to be 8, 4, 4

John.burke

AtticusFinch86 wrote: »

The Swot and Business plan were definitely separate BL indicators. You were asked to explain what a BP was and guide them on what needs to be included, that's well over a page of narrative at least. You were also asked to explain the SWOT and give them a detailed SWOT analysis (meaning a bullet point list won't suffice)


The credit management one was a single finance indicator.

Don't think so ; that's like treating the ias 16 and Ias 23 issues separately when clearly related. We'll see come October I guess, anything else is just speculation

jus_tin4

I actually thought that there may have been a indirect indicator for BL. Swot and business plan imo was to straight foreword for 2 indicators.

Anyone mention there was no finance person? Both were engineers. I didn't think there was a truest obvious strategy, I know that there were focused on child tech but other than that no mission or vision really.

I thought that was an issue, not an obvious point and prob worthless but I was looking for anything that might get me over the line

Humour Me

As long as you addressed all of the information requested, it doesn't matter if you answered them as separate or combined indicators.

AtticusFinch86

John.burke wrote: »

Don't think so ; that's like treating the ias 16 and Ias 23 issues separately when clearly related. We'll see come October I guess, anything else is just speculation

I promise you. They are 2 separate indicators. Each of them takes 1-2 pages at a minimum.

Also, there were 8 indicators in the Sims. We'd previously been told this would be the case. If they were a combined single indicator, that would mean there were only 7 in the sims.

That's not to say you wouldn't still get a C in both if you combined them and the depth of your answer was on the money, but there were definitely 2 C's going for them.

AtticusFinch86

jus_tin4 wrote: »

I actually thought that there may have been a indirect indicator for BL. Swot and business plan imo was to straight foreword for 2 indicators.

Anyone mention there was no finance person? Both were engineers. I didn't think there was a truest obvious strategy, I know that there were focused on child tech but other than that no mission or vision really.

I thought that was an issue, not an obvious point and prob worthless but I was looking for anything that might get me over the line

I think those issues were included to be used in the SWOT

John.burke

AtticusFinch86 wrote: »

I promise you. They are 2 separate indicators. Each of them takes 1-2 pages at a minimum.

Also, there were 8 indicators in the Sims. We'd previously been told this would be the case. If they were a combined single indicator, that would mean there were only 7 in the sims.

That's not to say you wouldn't still get a C in both even if you combined them and the depth of your answer was on the money, but there were definitely 2 C's going for them.

Aye, agree to disagree I guess. But that would make it 5 BL indicators as ignoring the credit management which was responsible for large write offs was clearly mapped to BL and Finance.

jus_tin4

AtticusFinch86 wrote: »

I think those issues were included to be used in the SWOT

Say your prob right! Just thought it was strange for no corp gov question across both papers, given the significance of it. Think I included some of it in my swot and then wrote and few bullet points at the end about lack of board etc as a quick add on near the end.

Humour Me

John.burke wrote: »

Aye, agree to disagree I guess. But that would make it 5 BL indicators as ignoring the credit management which was responsible for large write offs was clearly mapped to BL and Finance.

I actually don't understand how they could include a blended indicator like that. It's a single indicator so would they award a C for BL and a C for Finance? I don't think that's likely.

Alfred Borden

madhouse2 wrote: »

What do you think is the min to get Bc in the core?

Hopefully its a low bar for MA anyways

chazzy100

John.burke wrote: »

Aye, agree to disagree I guess. But that would make it 5 BL indicators as ignoring the credit management which was responsible for large write offs was clearly mapped to BL and Finance.

Mate was 100% 2 indicators. It even says "Secondly" and in a new paragraph. The credit management indicator was finance. Working capital management is part of the syllabus and has descriptive elements to it.

Qwert6

John.burke wrote: »

No fv ? a 3rd part paid 7 mil for the asset in the open market! This represents fv

somebody could have just paid this not necessarily the FV of the property? no?

Qwert6

AtticusFinch86 wrote: »

The Swot and Business plan were definitely separate BL indicators. You were asked to explain what a BP was and guide them on what needs to be included, that's well over a page of narrative at least. You were also asked to explain the SWOT and give them a detailed SWOT analysis (meaning a bullet point list won't suffice)


The credit management one was a single finance indicator.

how detailed do ya think they wanted it ? im scared now. I think I just used bullet points didn't really flesh it out much

jus_tin4

Qwert6 wrote: »

how detailed do ya think they wanted it ? im scared now. I think I just used bullet points didn't really flesh it out much

Same as! I don't think you'll would lose a c over that though... well fingers crossed!

LeTissier

I was very confused with the BL indicators myself. So I wrote a business plan for Techno and explained the elements of a business plan then went back and wrote an indicator on the ethics of handpicking 10 debtors for the circularisation. I seem to be the only person I've been talking to who did that though.

jus_tin4

LeTissier wrote: »

I was very confused with the BL indicators myself. So I wrote a business plan for Techno and explained the elements of a business plan then went back and wrote an indicator on the ethics of handpicking 10 debtors for the circularisation. I seem to be the only person I've been talking to who did that though.

The BL was def the swot and business plan.i thought there may have been a strategy issue but this could have been rolled into the swot. The debtor circulation was audit. It would have been an ethic issue if you were the auditor I believe( audit not my strong point) but it was more a case that we couldn't do it,that it would impact audit evidence if we did. I also mentioned that if we did it would have an impact on the report.

John.burke

chazzy100 wrote: »

Mate was 100% 2 indicators. It even says "Secondly" and in a new paragraph. The credit management indicator was finance. Working capital management is part of the syllabus and has descriptive elements to it.

Aye working capital management is a critical function to a business hence to just ignore it is clearly a strategic issue with potential to cause receivership. I.e no cash flow . Fair enough if ye didn't link this 2 strategy/poor organisation and BL. There was always going to be a blended indicator

unknown1990

Just realised that stupidly I weighted the interest rates for borrowing costs in the comp but I think you only do that for general borrowings. Would you say that's a fundamental error? I think the borrowings were specific just totally lost the run of myself with it

jus_tin4

unknown1990 wrote: »

Just realised that stupidly I weighted the interest rates for borrowing costs in the comp but I think you only do that for general borrowings. Would you say that's a fundamental error? I think the borrowings were specific just totally lost the run of myself with it

I would see this as only a minor. Would think you could still get c if your answer was still mostly right

AtticusFinch86

Qwert6 wrote: »

how detailed do ya think they wanted it ? im scared now. I think I just used bullet points didn't really flesh it out much

I doubt it'd need to be too detailed, 2-3 points on each.

From looking at past papers, you'll only be in bother if it looks like the below

Strengths
-Cash position
-Strong R&D
-Staff, etc.


I think they probably want you to briefly explain it a bit more

Strenghs
R&D --> company has proven track record in R&D which is vital in continously changing industries such as tech industry

Opportunities
R&D Facility --> Investment in R&D facility should bring further product innovations down the line. This is vital for success in disruptive tech sector



Again, looking at past papers, I'd say 2-3 on each would be plenty

unknown1990

John.burke wrote: »

Aye working capital management is a critical function to a business hence to just ignore it is clearly a strategic issue with potential to cause receivership. I.e no cash flow . Fair enough if ye didn't link this 2 strategy/poor organisation and BL. There was always going to be a blended indicator

To be honest it so isn't a big deal either way. Like if anything you had a really good finance answer and if you only saw three indicators in sim 2 probably dedicated a lot more time to the bl so I can't imagine it matters. Mike Farrell always says it doesn't matter how you split them out

AtticusFinch86

unknown1990 wrote: »

Just realised that stupidly I weighted the interest rates for borrowing costs in the comp but I think you only do that for general borrowings. Would you say that's a fundamental error? I think the borrowings were specific just totally lost the run of myself with it

I'm pretty sure they need to be weighted. The tricky part was that only the Sept expenditure was at the higher rate. But yeah, it's unlikely to have much of an impact on your rating for that indicator, it's a very minor detail

LeTissier

jus_tin4 wrote: »

The BL was def the swot and business plan.i thought there may have been a strategy issue but this could have been rolled into the swot. The debtor circulation was audit. It would have been an ethic issue if you were the auditor I believe( audit not my strong point) but it was more a case that we couldn't do it,that it would impact audit evidence if we did. I also mentioned that if we did it would have an impact on the report.

Yeah, I'd say you're right. I didn't see them throwing in indirect indicators anyway, just thought it was odd at the time not having either an ethics or Corp Gov indicator in either papers and decided to cover myself. Plus the business plan indicator was very generic and didn't seem like a full indicator.

unknown1990

AtticusFinch86 wrote: »

I'm pretty sure they need to be weighted. The tricky part was that only the Sept expenditure was at the higher rate. But yeah, it's unlikely to have much of an impact on your rating for that indicator, it's a very minor detail

Ok thank the Lord for that!

AtticusFinch86

LeTissier wrote: »

Yeah, I'd say you're right. I didn't see them throwing in indirect indicators anyway, just thought it was odd at the time not having either an ethics or Corp Gov indicator in either papers and decided to cover myself. Plus the business plan indicator was very generic and didn't seem like a full indicator.

There was a professional ethics question in the core paper so that would cover that. But yeah, bit surprised not to see corporate governance on it, but then again, it can't come up every year.

Jsmac67

Qwert6 wrote: »

somebody could have just paid this not necessarily the FV of the property? no?

Agreed, to accept a bid of 7mil and commit to lease payments of 12.5mil would suggest 7mil is either below MV or the company had no calculator.

jus_tin4

Anyone back studying today?

Faecanditate

For finance on sim 1. Did ye work out the cash conversion cycle for each year? Think mine went from c. 50 days in 2015 to about 80 in 2017 with the debtor/inventory days going up but creditor days down?? So I said her concerns were valid etc and make recommendations. Do they ever release a summary of the % of people who got C/BC in each subject?? Just wondering how many actually go down on the BC subjects, hoping it's a low barrier to get it. I'm sure the assessment rationale they put out is open enough to the person correcting?? Is it one corrector per paper or several with different disciplines?

AtticusFinch86

Faecanditate wrote: »

For finance on sim 1. Did ye work out the cash conversion cycle for each year? Think mine went from c. 50 days in 2015 to about 80 in 2017 with the debtor/inventory days going up but creditor days down?? So I said her concerns were valid etc and make recommendations. Do they ever release a summary of the % of people who got C/BC in each subject?? Just wondering how many actually go down on the BC subjects, hoping it's a low barrier to get it. I'm sure the assessment rationale they put out is open enough to the person correcting?? Is it one corrector per paper or several with different disciplines?

I might be wrong but I don't think it's broken down at that level but you can often read between the lines in the examiner comments. It'll often say something along the lines of over 70% students got BC or above (or something similar).

The bar for a BC is quite low. For example, I mis-read the Finance (Working Cap) question in the Sims and though the company was looking to bring in a "late payment penalty" not "late payment procedures" so I missed out on that element of the indicator. But I know I'll still have done enough in the other elements of the indicator to get the BC I need.

Getting from NC to BC doesn't take much, but getting from BC to C is a lot harder. The hardest part of the exam is getting the 3 C's in FR and, to a lesser extent, the 2 C's in BL. I'd say that's where the vast majority of people fail.

AtticusFinch86

jus_tin4 wrote: »

Anyone back studying today?

Yeah, doing APM now. I've already done a bit on it in the last 2 weeks and I'm bringing a HC in from the interim so I'm going at a leisurely pace today.

Faecanditate

AtticusFinch86 wrote: »

Don't think it's broken down at that level but you can often read between the lines in the examiner comments. It'll often say something along the lines of over 70% students got BC or above (or something similar).

The bar for a BC is quite low. For example, I mis-read the Finance (Working Cap) question in the Sims and though the company was looking to bring in a "late payment penalty" not "late payment procedures" so I missed out on that element of the indicator. But I know I'll still have done enough in the other elements of the indicator to get the BC I need.

Getting from NC to BC doesn't take much, but getting from BC to C is a lot harder. The hardest part of the exam is getting the 3 C's in FR and, to a lesser extent, the 2 C's in BL. I'd say that's where the vast majority of people fail.

That's what I'm hoping for. Id be sick if I actually passed all the harder ones and failed the whole lot on a BC requirement! Nothing we can do about it now anyway only wait the long wait!!

Qwert6

I hate FAE's. don't think ive passed on BL now as I don't think ill have done enough on either days. Im totally terrified but sure gotta try focus on elective. Hope the tax one is a nice paper