DFS - My Suggested Answers

peugeot

I have attached a copy of my suggested answers to DFS December 2007 sitting.

Please feel free to contact me should you have any questions.

I hope the answers help to ease any anxieties and that they are clear.

Best wishes
Steve

SalG

Thank you Steve - you're very kind to do that. I (& I'm sure many others) appreciate it LOADS!

peugeot

That's ok. Hopefully the answers will put some minds at rest.

Kind regards
Steve

parlabane

Thank you for that, Steve. A few figures seem familiar, so I am now a little calmer.

(Have only just joined, and this is my first post, so: hello everyone.)

Regards

Shaun

peugeot

No problem Shaun. Glad they've calmed you down!!!

Can I point out the following which have arisen from queries raised to me:

* if you did not set the workings out on the next page of, say, the income statement/balance sheet (as was done in my answers) you will not lose marks.
* you do need to show your workings even if your answer is incorrect. This is particularly the case in the consolidated reserves working in consolidated balance sheet task. A marker cannot give credit for a wrong answer if s/he doesn't know your approach.
* if you did not show how to calculate the ratios in the report you will lose marks. The question explicitly asked how the 4 ratios are calculated.
* if you did not write a report when you were asked for it, you will probably lose presentation marks. Marks are awarded for following the examiner's instruction.
* if your cash flow statement/balance sheet/consolidated balance sheet didn't balance - don't panic. As long as the basic approach is correct you should be ok.
* business combinations are dealt with in IFRS 3 - the answer is not incorrect. I accept that Goodwill is dealt with in IAS 38 "Intangible Assets" but IAS 38 was not tested. Goodwill is mentioned in IFRS 3 though the IFRS does not explicitly deal with Goodwill in its entirety - a number of, if not all of, the accounting standards mention other standards - e.g. IAS 36 "Impairment" is mentioned in IAS 16 "Property, Plant and Equipment" but the two are entirely different standards. IAS 38 considers when to recognise, and how to measure, an intangible fixed asset, which could be goodwill, patents, licences, copyrights, brand names, software etc. This is different than a business combination because it isn't necessarily presupposed that goodwill will always arise or be purchased on a business combination.
* I was asked about whether referring to IAS's/IFRS's when preparing the journals was needed (task 1.1). This was a waste of time if any student did this because (a) you would have lost time in referring to the standards, because (b) it was not asked for in the question.

I was also asked for my opinion of whether I thought the paper was fair (I hate this question because I know some students won't necessarily agree with me). But I will be entirely honest:

I thought the paper was extremely passable. Similar tasks have all been asked in previous papers and a well-prepared student will have absolutely no problem in passing this paper. In fact, I will go as far as to say that the DFS examiner has certainly not tested candidate's abilities to the level that should be tested at technician level.

I do feel that the AAT should place more emphasis on testing more accounting standards than they do. There are 20 examinable IAS's out of a possible 37 and there are only ever one or two asked about in their entirety at every DFS sitting. I do feel that section B was more friendly in December than in June as I think most students hate things like "gearing ratios" appearing. Overall DFS is becoming rather predictable and I suspect if the trait continues students will also become to expect predictability.

Undoubtedly some students may disagree with my comments and moreso my feelings towards future DFS exams but as the AAT is a professional qualification in its own right, papers should be set with a degree of unpredictability to avoid students question spotting.

Best regards
Steve

SueChibeba

Thanks for the answers, well after sitting DFS 4 times already i hope this time i pass it, it was a much easier exam this time round

peugeot

It was a much easier paper to answer than the June 07 paper, I feel.

I hope you will get through it this time!!

I don't think I will have time to be on the forums until next year so will take this opportunity to wish you all a happy (and stressless) xmas and new year.

See you all in 2008!!

Best wishes
Steve

sloshed

:thumbup1:Hi Steve as a student may I say a big thank you for your assistance in hopefully passing my exams particularly DFS. Have a good Xmas / New Year

parlabane

I agree about the assessment of the accounting standards.

I spent hours learning all 20 standards just as our tutor drummed into us that we should, yet it seems to me that it would have been quite possible to show competence on the IAS parts of this exam if you'd hardly glanced at them (you might not know the exact definitions but you could have a decent stab at defining a business combination and the elements in the accounting equation just from common sense/general experience).

I know exams can never cover everything, and the idea is that you should learn all you can so that you can deal with any questions that do come up. But still, the fact that the syllabus places such an emphasis on a major area which is then barely assessed is... well, quite annoying. I could have spent all that time doing more practice on the numerical stuff. (Or watching the darts.)

I suppose it's daft to complain though!

Merry Christmas,

Shaun

peugeot

Hi Shaun,

Well it can work in your favour. However, my advice (always has been and) will always be to study all the IAS's which are examinable. Over the years I have known students come on here after a DFS sitting in absolute horror at what they have just sat simply because they "weren't expecting what came up". You had the right approach in studying all the IAS's. I would be very surprised if DFS pass rates for December 2007 are low but (I'm taking a gamble) I'd be very surprised if June 2008 pass rates are high if DFS takes one of its fateful turns and cranks up a level in terms of difficulty (which is possible).

best wishes
Steve

peugeot

Examiner Review Board quote from PQ Magazine re DFS:

DFS was a lovely, straightforward paper; TB with adjustments all seen in previous papers, and a standard consolidated balance sheet with associated standards tested in the same way as on previous papers. A standard cash flow statement question was also required. Section 2 required ratios that most students consider among the easiest to interpret and the additional task was identical to previous papers. This paper was a gift to students.

richardw

The June 2008 paper wont be affected by the December 07 paper, as it would have been written in time for the December 07 exams, in case there was a problem with the Dec exam paper.
They will have also started producing the Dec 2008 paper, in case there is a problem with the June 2008 paper at exam time.
Therefore the feedback will go into the next exam after that, June 2009.

If the exams do become straightforward, over time, its not fair on future students, who will use them as exam practice, & could then be faced with a radically different exam, because the AAT examiners need to up the standards.

This is where skills tests work well, as additional questions can be asked of that particular student.
The same can be done with CBA's.

peugeot

I do tend to agree that the examiners need to increase the difficulty levels in terms of technician level exams - I can't really comment on the other papers but DFS this time was not a particularly challenging paper.

There have been sittings where students have come on the forums after doing a DFS paper and they have been absolutely horrified at the difficulty level. I fear that students may well become complacent (certainly those doing distance learning) and be shell-shocked if DFS takes a turn for the worse in terms of complexity. In June 2007, I received countless queries when I published my suggested answers and the vast majority of those queries were in connection with the gearing ratio. I deduced from this that where the examiner throws in a topic that is not regularly examined - the candidates jump up and down about it, despite the subject or topic being examinable. I still say that setting a paper such as DFS to this level of ease will encourage a candidate to question spot (and it does happen).

Best regards
Steve

beverly hudson

steve

I hope you don't mind me asking but what exactly do you do or does anyone else kow what he does? I train corporate clients having been a tutor for a well known training establishment and I am amazed at some of your posts and the advice you give.

I'm intrigued.....

Beverly

peugeot

Hi Beverly,

I wouldn't have thought that my advice would "amaze" people!! Without sounding pompous, there are others on here that give just as good (if not better) advice, but thank you for your kind words.

I work in practice as a senior accountant dealing in audit/accounting and tax but technical compliance and financial reporting issues are now becoming a much larger part of my role.

Kind regards
Steve

beverly hudson

hi steve,

I hope you didn't mind me asking about your work. I thought maybe you worked as a fellow tutor or something similar.

Bev.

peugeot

No I didn't mind you asking. I'm not a tutor - I enjoy what I do but I think it's one thing giving advice and writing articles for accountancy web sites, but another standing up in front of a class of 40 teaching it!! I don't think I'd be much good at that!!