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The examiners’ workshops: F7

Here’s what the ACCA examiners had to say about your performance at the Global Learning Conference

July 2017

F7 Financial Reporting

Exam structure
Section A – 15 x two-mark OTs
Section B – three OT cases, each consisting of five two-mark OTs, based around a common scenario.
Section C – two 20-mark constructed response questions, one on the preparations of financial statements, the other on interpretations.

Meet the new examiner
The examiner, who took over from Steve Scott about a year ago, wants to encourage a love of IFRSs! He said ACCA PQs need to be able to talk about the key principles of the 27 standards in F7.
When it comes to section A, he said that there will be some K questions there.
Turning to section C, he revealed he will ask either a single entity financial statement or a consolidated financial statement question. The single entity question could ask for an adjustment to profit or extract, rather than a full standard. A cash flow element could also be included. The consolidated question will ask for full detailed SPL and SFP. It would be unlikely he will ask for both of these together – although he might ask for them to be summarised. Students should also understand he can include a discussion element.
The examiner stressed that the interpretation question is historically not well done. The single entity financial statements question could ask for redrafting figures before calculating ratios. Generic statements here though are unlikely to be awarded many marks.
For consolidated financial statements the analysis will be more focused on group-related issues. These questions may also involve production, he said.
The examiner revealed that the move to three sections has helped pass rates and question completion is significantly higher than it used to be.

Problem areas
He emphasised that sections A and B often contain ‘distractors’, so PQs must take their time.
Candidates struggle when asked for adjustments to draft profits and time apportionment of consolidated SFP with mid-year acquisition.
Students really do need to ramp up their interpretation skills too, and the examiner stressed that textbook answers are worth very little – you have to use the information provided to structure your answer.
CBE candidates also have to show their workings for their ratios and calculations. He wants to know where the ratios come from.

Looking ahead
From September 2017, IAS17 Leases is replaced with IFRS 16 Leases.
The calculation on lease liabilities will be largely similar in F7 and there will be an exemption for low-value/short-term leases. The examiner also admitted he probably won’t examine a full cash flow question in F7.

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