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ACCA December exam tips for F5 to F9

16 November 2017

December 2017 tips for F5 to F9...

• The exam will be approximately 40% calculation and 60% discussion, meaning that it is not sufficient just to be able to perform all of the calculations to pass.
• For section A & B it’s the whole syllabus you need to know!
• For section C expected areas include budgetary systems, planning and operational variances, mix & yield variances and evaluation of the company performance (either as a whole or on a divisional basis).
• There is no longer any formal time, however you are strongly advised to plan your answers to section C before you start to write.
• You must ensure you make reference to the scenario in your answer.

Section A
• Due dates for payment of income tax (including payments on account).
• Due dates for payment of corporation tax (including instalments for page companies).
• Filing dates for the income tax & corporate tax returns.
• Penalties & interest for late payments and returns.
• VAT rules on registration, impairment loss (bad debt) relief, and the SME schemes relating to cash accounting, annual accounting and flat-rate schemes.
• Inheritance tax due on lifetime transfers both in the donor’s life and on death.
• Statutory residence tests for individuals.
• Identification of groups of companies for corporate tax loss reliefs and gains.
• Trading loss reliefs for both companies and sole traders.

Section B
• See section A subjects, but with longer scenarios!

Section C
• You should spend at least 50% of your revision time answering section C questions.
• Learn your income tax & corporation tax proformas.
• Employment benefits.
• Property income.
• Relief for pension contributions.
• Adjustments to profit to arrive at trading income for both companies & sole traders – in past sitting we have seen a number of questions where you have to correct errors in computations in the scenario.
• Capital allowance computations.
• 10-marker on VAT, inheritance tax or capital gains tax.

Section A
• Several questions on consolidation & interpretation of financial statements.
• Expect questions on inflation and specialised entities, the non-core areas.

Long questions
• Two 20-markers – one covering interpretations and the other preparation of financial statements.
• One question on the context of a single company and one in the context of a group.
• Accounts preparation, with extracts or stand alone calculations or full statement of P&L and other comprehensive income and/or statement of financial position.
• Accounting for items.
• Statement of changes in equity, statement of cash flows extract, earnings per share calculation or linked written topic.
• Consolidated question including one subsidiary and often an associate, with adjustments, eg fair values, deferred/contingent consideration, PUP on inventories/PPE, intragroup trading and balances, goods/cash in transit.
• Single entity with preparation from a trial balance or restatement of given financial statements with the usual adjustments for depreciation, revaluation and current/deferred tax (revaluations), plus a mixture of adjustments on other syllabus areas, eg leases, substance over form issues, financial instruments (change in fair value or amortised costs), share issues, government grants, inventory valuation, revenue recognition or construction contracts.

Q16 to 18
• Audit planning.
• Audit risk (identification and explanation of audit risks from a scenario and explanation of the auditor’s response to each risk).
• Internal audit.
• Internal controls (identification and explanation of deficiencies in internal control and the recommendation of suitable internal controls or descriptions of tests of controls).
• Audit procedures (both substantive procedures and tests of control).
• Pay attention to the verbs – ‘explain’ requires a sentence and will score one mark if properly explained, whereas ‘list’ simply requires you to list out information and will score 0.5 mark per point.
• Try to use a tabular format in your solutions where relevant as the examining team have stated that candidates who do this score better.

Section A
• Ratio analysis.
• The concept of shareholder wealth.
• Financial intermediation.
• Fiscal & monetary policies.
• The efficient market hypothesis.

Section B
• Working capital management – operating cycle, the impact of a change in credit period or accepting a factor’s offer).
• Business or security valuations (methods of valuation).
• Financial risk management (mainly in the form of currency risk, but maybe an aspect of interest rate risk).

Section C
• Working capital management.
• Investment appraisal (likely to feature NPV with inflation and tax).
• Business finance - either an evaluation of financing options (interest coverage and gearing ratios), or a cost of capital calculation.
• Which ever of these 3 topics that does not feature in section is likely to appear in section B of the exam.

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