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    ACCA F7 Tips & FAQs - Kaplan



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    ACCA F7 Tips & FAQs - Kaplan

    Bài gửi by minhlong on Thu Dec 22, 2011 1:49 am

    F7 Financial Reporting (FR)

    Exam Technique

    Expect not to finish any question. When you run out of time for that question, stop and move on to the next. Not finishing a question is not something to feel bad about, it’s just part of your technique for passing the exam.

    Be prepared that your statement of financial position or cashflow may not balance. If it doesn’t, leave it and get on with the rest of the paper – don’t worry about it now. (If it does balance, well done!)

    Q1) Groups consolidation

    For the groups consolidation question (Q1) you will benefit from having the proforma/standard workings of your final answer set up first. For example if the question requires a consolidated SFP then drawing up the SFP with open brackets beside those numbers that do not need a standard working can get all the easy adding across 100% of the Parent and subsidiary figures. The other headings can have the standard working number written beside them instead. A couple of lines would need to be left for each section of the SFP in case other things come up in the additional information.

    In addition to this setting up the standard workings can also be done. The subsidiaries’ share capital figures and the year end retained earnings can be put into these without reading any of the additional information. In addition to this the parents retained earnings figure can also be put into W5 (Retained earnings) without reading any additional narrative.

    With all of the proformas and standard workings set up, it means that you are able to tackle the issues in the order that they are presented in the question. It also allows you to deal with both sides of any adjustments as everywhere is set up to make the adjustments. It hopefully prevents non-balancing accounts and means that each issue only has to be addressed once; thus helping with time management. Also if you run out of time, you will get full credit for all that they have done as everything is referenced through.

    A similar process can be applied to the income statement equivalent of setting up final answer and workings to help tackle the issues that come up.

    Q2) Single company financial statements

    Single company financial statements (question 2). As with the groups question, it may be possible to get the proforma of the final answer set up, particularly if the data in the question is set up with the draft financial statements rather than the trial balance. If possible it then means that open brackets can be used and the draft figures placed in them, ready for adjustments as they arise. Generally speaking there are often more adjustments required for cost of sales figure in the income statement and the PPE figure in the SFP. As such I would suggest these are likely to need separate workings rather than just a bracket beside the final answer.

    Revision financial statements (question 2) If there is a topic/adjustment that you are unsure of, come back to it. You are better to get the adjustments that you are comfortable with done first. It is easy to get bogged down and waste time on a difficult adjustment at the expense of doing an easier one that appears later in the question.


    Q. How do you treat PUP adjustments between a parent and subsidiary?

    A. For transactions between a parent and subsidiary, you always reduce the inventory on the SFP. The opposite entry will be to reduce the selling company's reserves, so if the selling company is the parent, reduce W5, for the subsidiary reduce W2 (SFP and post-acquisition column).

    Q. How do you treat PUP adjustments between a parent and associate?

    A. For transactions between a parent and associate, you always reduce the group reserves on W5. The opposite entry will depend on which company is holding the inventory. If the parent is holding the inventory, and therefore the inventory is included on the group SFP, the inventory on the SFP should be reduced. If the associate is holding the inventory, you should reduce the investment in associate.

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