Steve's DFS Answers are Here

RowanB

Rachey wrote: »

This is where I wish we got our papers back (not to start another debate on that though!!) because i recognise every single figure Steve put, i didnt put anything extra in or missed anything out!! Oh I've completely given up anyway, i've probably made a transition error or somethin!!! Shouldnt cost me a fail though, hopefully.

To be honest, during the exam, I was thinking 'why am I wasting time trying to get one extra mark?', but it was out of vanity! It had become personal by that point, and I wanted the buzz of seeing it balance. The amount of time I wasted on that task was poor in terms of exam technique. You were probably more sensible than me. What I love about AAT exams is though, you get a ridiculous amount of time, and you can almost complete it at a
leisurely pace. I even had time to go to the toilet, not that you need to know that. lol

I did a degree in maths and statistics where you are presented with non-standard problems that require a considerable amount of thought under very tight time restrictions, and I never appreciated the point in that. Why not focus on assessing a candidate's ability to think logically and solve problems, rather than their ability to almost parrot-learn solutions to the extent where they don't need to think at all? Maybe I shouldn't be questioning this, but even one of the lecturers appreciated my grievance.

I see what you mean about getting papers back. I always like to see what I've done wrong. That's why it was nice that I made the income statement, consolidated SFP and cash flow balance, but even if none of them had, I'm sure I'd have done fine anyway. That's another sensible aspect of AAT asssessment. If you can show you've got the right idea, you'll generally pass.

Julia

Steve the effort you put in to helping students and your reputation amongst the profession is fantastic. I am a member of a private society of accountants and we have made a donation to your charity because your experiences have touched us.

God bless your niece and may she now enjoy a happy and healthy life.

Steve Collings

That is really nice of you Julia. Thanks for that

Best wishess
Steve

DAVID LAWES

Steve - many thanks for doing these answers. Although I am fully qualified MAAT, every sitting I attempt the PCR, PEV and DFS papers in my own time because I am expected to tutor AAT students in my job. I can't do this effectively unless I know what the exams are looking for, and your and Sandy Hood's answers are a great help in this regard.

One point re your answers to Task 2.1. Would it have been relevant to highlight the large increase in non-current assets between 2009 and 2010 as a possible reason for the deterioration in the net profit percentage? Non-current assets went up from £16,200K in 2009 to £22,916K in 2010. I make that a 41.45% increase. More assets mean more depreciation charged to the income statement, thus reducing net profit. In this question, this is reflected in the steep increase in administrative expenses, to which depreciation is normally charged - £2,574K in 2009, £4,068K in 2010. I make that a 58% increase.

I know you referred in your answer to "increased overheads", which effectively covers my point, as depreciation is an overhead. But I was always taught to anchor my explanations to specific details in the financial statements. In my experience, students tend to overlook the knock-on effect of additional non-current asset purchases on the income statement, in terms of the inevitable extra depeciation.

Is the point that I am making a valid one? And would it have earned extra marks? Don't the examiners like candidates to hom ein on specifics like this, and put forward explanations consistent with them? Grateful for your advice on this one please.

Steve Collings

Hello David,

I think in the discursive elements of section 2, provided you don't stray beyond the margins of the question requirement then bringing out specifics, as you state, is a very valid method. It demonstrates an ability to analyse the financial statements in specific details and in real-life, clients and non-financially orientated individuals always appreciate reasons why figures have fluctuated from one period to the next.

Best wishes
Steve