acca f7 dec12 exam commentary

7/28/2019 ACCA F7 Dec12 Exam Commentary

1/3

THIS FREE CONTENT WAS PROVIDED TO YOU BY BPP

ACCA EXAM SURGERY

FOR MORE INFORMATION, GO TO

BPP.COM/ACCA

FOLLOW US ON:

FACEBOOK

TWITTER

LINKEDIN

ACCA F7 (INT)

FINANCIAL REPORTING (INTERNATIONAL STREAM)

EXAM COMMENTARY

December 2012


2/3

FREE CONTENT PROVIDED BY ACCA EXAM SURGERY. JOIN US ON FACEBOOK / TWITTER / LINKEDIN

BPP Professional Education is an Appro ved ACCA Learning Qual i ty Partner the highest level ofaccreditation available. Our status guarantees you the highest levels of tuition and top-quality learning materials.In the last five years weve produced over 220 global prize winners and commendees, and we consistentlyachieve pass rates in excess of 75%. Find out more: bpp.com/acca

General Imp ression

The paper followed a similar format to the one outlined by the examiner, and therefore was

largely as expected.

Overview of the questions :

The paper followed a similar format to the one outlined by the examiner, and therefore was

largely as expected.

Q1: Group financial statements, often with a small written element (as in this case)

Q2: Preparing/redrafting financial statements: in this case preparation of a statement of

comprehensive income, statement of f inancial position and statement of changes in equity

Q3: Performance appraisal calculation and/or interpretation of ratios, preparation and

interpretation of a statement of cash flows (calculation and interpretation of ratios in this

case)

Q4: Remaining areas of the syllabus

Q5: Remaining areas of the syllabus

We felt this sitting's exam was reasonable, and more reasonable in terms of time pressure.

QUESTION REVIEW

Question 1 - 25 marks

This question required candidates to prepare a consolidated statement of profit or loss

(income statement) (14 marks) including a subsidiary acquired 3 months into the year and

an associate owned throughout the year for which the profit figure was given.

In addition a goodwill calculation (7 marks) and a discussion the treatment of the fair value

and subsequent changes in fair value of 'leased' property was required.

The question included adjustments for deferred consideration, fair value of plant and a

contingent liability, intragroup trading, unrealised profit on inventories and impairment of

goodwill.

The associate profit was given and there was no change in the value of the contingent

liability, making this question manageable.


This question required candidates to prepare a statement of comprehensive income, a

statement of financial position and a statement of change in equity from a trial balance.

There were the usual adjustments for depreciation, current and deferred taxes. The

complications this sitting included deferred income re servicing element of revenue (to be

split into current and non-current parts), issue costs and interest on a loan note, dividendspaid, revaluation of land and buildings and fall in value of investments in equity instruments.

Often combining the

conceptual underpinning of a

topic and treatment in practice


3/3

FREE CONTENT PROVIDED BY ACCA EXAM SURGERY. JOIN US ON FACEBOOK / TWITTER / LINKEDIN

BPP Professional Education is an Appro ved ACCA Learning Qual i ty Partner the highest level ofaccreditation available. Our status guarantees you the highest levels of tuition and top-quality learning materials.In the last five years weve produced over 220 global prize winners and commendees, and we consistentlyachieve pass rates in excess of 75%. Find out more: bpp.com/acca

The was a lot to do in this question as the three statements were required, although this was

balanced at this sitting by questions 1 and 3 not being quite so demanding. The level of the

adjustments was on a par with past exams. Students who followed the methodical approach

we recommend would have done well.


As has become expected question 3 was a question in the context of interpretation or

statements of cash flows. At this sitting, a full question on calculation (9 marks) and

interpretation (12 marks) of ratios came up, with a further 4 marks discussing limitations.

The calculations were straightforward. There was very little additional information to give

clues as to what to discuss, although some candidates may prefer that. Limitations had not

come up for 3 years and was a straightforward question.

This was a 'standard' interpretation question where candidates could score well.


Part (a) (4 marks) was a theoretical part covering the definitions of two qualitative

characteristics of financial information (understandability and comparability) coupled with a

discussion of the role of consistency in the comparability characteristic specifically in relation

to changes in accounting policies.

Part (b) (5 + 2 marks) covered some standard construction contract calculations and an

explanation of why a change in the stage of completion is a change in accounting estimate

rather than a change in accounting policy.

This was a straightforward question to that candidates should have been pleased to see.


Question 5 covered property, plant and equipment and environmental provisions. Part (a) (3

+ 3 marks) require preparation of statement of financial position (3 marks) and profit or loss

(3 marks) extracts in respect of a furnace which had two depreciable components, and a

capitalised provision which need to be compounded. There was also a government grant

treated as deferred income.

The calculations were a little fiddly, especially as the figures required were for the third year

of the asset. The brought down figures from the second year were given, but candidatesmay have spent time 'proving' them.

Part (b) (4 marks) required discussion of whether there was an obligation to fit anti-pollution

filters. This was based on the 'smoke filters' example in IAS 37 which we include in our

Course Notes and, although the example itself takes some understanding, it was

straightforward for those who had studied the BPP example.

acca f7 dec12 exam commentary

Documents