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16 November 2017

LSBF TIPS - ACCA Exams Dec 2017

Sections A and B: Costing methods (ABC, throughput & lifecycle) and decision making (Relevant costing, linear programming and uncertainty), Budgeting and performance evaluation

Section C: Non - Financial Measures (Building Blocks & Balanced scorecard) and advanced variances

Section A
The 15 MCQ questions will cover a broad range of the syllabus.
This section typically contains questions regarding tax compliance and self-assessment e.g. time limits for submission of information and payment of tax including penalties for non-compliance; residence rules.

Section B
Q16 – Q20 (10 marks)
Chargeable gains
• Company making disposals including sale of shares, takeovers, insurance rollover relief, rollover or holder relief; calculating the chargeable gain and corporation tax. OR
• Capital gains tax question - calculating gains made by an individual on disposals of residential property versus disposals of non-residential assets e.g. shares with some disposals qualifying for ER, gift relief, PPR/ letting relief.
• Part disposals and chattel rules.
• Due date for payment and for making any elections.

Q21 – Q25 (10 marks)
• VAT registration
• Calculation of VAT payable, tax point, bad debts, special schemes, overseas aspects of VAT, VAT group
• Errors and default surcharge scheme

Q26 – Q30 (10 marks)
Inheritance tax
• Calculating IHT on lifetime gifts made into trust when the donor is alive.
• Calculating IHT on donor’s death (i.e. on lifetime gifts made in the prior 7 years and on the death estate).
• Advantages of making lifetime gifts over death gifts e.g. taper relief, lifetime exemptions such as the annual exemption, marriage exemption, small gifts relief normal expenditure out of income.
• Unused NRB between spouses
• Remember diminution in value principle used to value gifts of unquoted shares and land.
• Payment of IHT – by who/ by when

Section C
Q31 (10 marks)
• Tax planning question e.g. whether an individual should operate as a sole trader or trade via a company, how profits from a company should be extracted (salary versus dividends), looking at the tax planning opportunities available to married couples etc.

Q32 (15 marks)
Income tax
• Adjustment of profit or loss for a sole trader or partnership starting to trade (opening year rules) or ceasing to trade (closing year rules).
• Calculating income tax payable, with trading income, interest income and dividend income, property income, tax-free income and perhaps employment income. Remember the savings income and dividend income nil rate bands when calculating the income tax liability.
• Personal allowance rules
• Tax relief for gift aid donations and/or personal pension contribution
• Annual allowance (tapered) in relation to the maximum pension contributions that qualify for tax relief.

Q33 (15 marks)
Corporation tax
• Adjustment of profit, including deducting the allowable element of lease premium and calculating / deducting capital allowances; calculating interest receivable.
• Property business income for a company.
• Corporation tax implications of companies belonging to a 75% loss group and/or implications of a company having 51% subsidiaries.
• Calculating corporation tax for a large company and instalment payments.

For the 60 marks of MCQs in Section A & B, the entire Syllabus must be covered, including the more obscure Standards (recent questions have covered R&D, Government Grants, Borrowing Costs, Investment Properties, etc). Also important are Depreciation and Revaluation, Deferred Tax, Associates, effect of company payment policies, etc on Working Capital ratios. Watch out also for Objective Test Questions ie where no alternative answers are given to guide you, usually in numerical questions.

For Section C: Ratios & Interpretation, including Adjustments to be made before comparison to last year or a different company; Published Accounts with Standards, including Cash flow aspects; Consolidations

Section A – all syllabus areas, including ethics, governance and audit reports
Section B – practical scenario questions on internal control objectives, procedures and tests; substantive procedures; audit risk and response

Section A MCQs – will cover the entire syllabus

Section B – be prepared for a mini scenario with 5 mcq’s on Valuation / Foreign Exchange Risk / Cost of Capital

Section C – 2 long questions which will in all likely be on Investment Appraisal and Working Capital Management

- Chairman/CEO/NED roles
- Director Remuneration
- Rules v Principles approaches to governance
- Insider v Outsider, inc Family/Founder Companies
- Public Sector Governance
- Effectiveness of controls
- Audit committee roles/effectiveness
- Qualities of effective information
- Enterprise Risk Management
- Strategic v operational risks
- Objective v Subjective risk assessment
- Risk appetite
- Risk correlation
- Embedding risk strategy and awareness
- Corporate citizenship
- Kohlberg moral development
- Gray, Owen and Adams
- Professionalism and Public Interest
- Integrated reporting
- Social and Environmental Audit

Mostly likely performance or position but even though a cfs was examined in the last exam another cfs is not impossible.

Q2 and Q3
The usual suspects of NCA and provisions and revenue and FI and pensions and so on.

The current issues may look at the weakness in current reporting in provisions or goodwill or disclosure.

Strategic analysis (internal).
Evaluation of strategic choice (SFA).
Marketing mix.
Improving business processes (Swim Lanes).
Project mgmt.
Three lenses.

Valuations within Mergers and Acquisitions/and or Corporate Reconstruction

Hedging Interest Rate Risk

Adjusted Present Value

Choice of KPIs
Management Accounting to support decision - making
Need for improved information / systems
Reward systems
Decision making under uncertainty

- IHT with the death estate including BPR and APR and lifetime gifts gifts
with reservation and relief for a fall in value. Domicile including deemed
domicile and election to be treated as UK domiciled and deed of variation.
• Takeovers and mergers.
• Group question, sale of shares versus sale of the trade and assets, including
SSE and the degrouping charge.
• Overseas aspects of corporation tax including branch versus subsidiary.
• Relief for trading losses made by a sole trader/partnership at the end of the
trading cycle.
• Rules to determine residency and remittance basis
• Investment in a VCT/SEIS the theory versus investing in a registered
pension scheme.
• Share incentive plan versus EMI share option scheme.
• Personal service company.
• Property business profits including rent a room relief and the advantages
of furnished holiday letting properties.
• Ethics .

- Audit Risk
- Additional Info to help assess risk
- Analytical Procedures re risk assessment, ratios
- Accounting Matters and audit procedures (inc sale and leaseback)
- Ethics and Prof Issues (inc quality control, advertising, money laundering)
- Forecasts
- Audit report scenarios (inc uncorrected misstatements – ISA 450)
- Reporting to Audit Committee
- Big data and data analytics
- Initial Audits
- Difficulties in audit of estimates and fair value
- Subsequent Events

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