FNST - Did Exam Today. Negative Feedback!

wannabebean

Hello All

Sat FNST today. As usual the AAT put some questions in there that didn't make it into the text book ? Still that's to be expected!

Bit annoyed at a few things

Feel that I messed up a bit on the Consolidated Statement on Financials.

The parent company bought into the subsidary at 60%. The value of the retained earnings over the year for the subsidary increased. Is this something that is added to a revaluation reserve? Could not balance the CSOFP at all. £180,000 out.

Second adjusting a non-adjucting events. According to Mr Cox's book, non-adjusting events after the end of the reporting period must be disclosed as notes? Adjusting events, however, must be adjusted in the actual accounts. How can an event be adjusted in the accounts when the accounts have been signed off by the director of the company after the year end? The accounts will already have been submitted to companies house? The reference material online is excellent and explains clearly that it is not possible to alter accounts after the end of the reporting period. The exam question set by the AAT on this subject does not contain enough information to answer the question. If the accounts have been submitted, then they can not be altered until the next year.

I have been reading alot of comments about AAT 4 and it's level compared to a degree. I am a University graduate and I can safely state that the AAT 4 is not even close to a "first year at university". The reason the exams are at all a challenge is because the course texts are rubbish. The actual exams are simple and the material isn't far behind. If the AAT had bothered to enter into a proper consultation with the various education providers and authors ( Mr Cox, I am certain, has tried his very best) then they need a rocket.

Completely losing all motivation. Feel like the AAT is a waste of time and doing an AAT exam is like sitting a suduko puzzle. May as well ignore the text book completely. Too many examples, poorly explained and half the text totally out of touch with the actual exam.

If you are doing the AAT Level 4 FNST - make sure you know where the revaluation reserve is accounted for. Ensure you know about accurals and prepayments in the SOFP. Take up reference (somewhere outside of the AAT material) about adjusting and non adjusting events AFTER THE REPORTING PERIOD. Actually take it up here:

Adjusting Event - adjust the accounts accordingly (how is anyone's guess) making sure you adjust the SOCI and SOFP.

Non-adjusting Event - no need to adjust the accounts. Make a note on the accounts (after they have been submitted to companies house - and wait on your fine) stating the nature, timing and likely financial impact of the event. You must only do this if the event is considered material.

Why does it take the AAT texts 6 pages to explain this? And explain it badly?

GET IT SORTED AAT AND STOP WASTING MY TIME.

Bluewednesday

Re your adjusting events problem, it related to anything that comes up between the year end and the date of signing the reports by the director. The main problem is deciding whether the condition existed at the year end.

So it might be that after the year end a major customer goes into liquidation and you find out before the accounts are prepared, you have to decide whether the condition existed at the year end (and therefore whether you should make a provision in the accounts) or, assuming it is material, whether to make a note or not. All of these things will happen before they are filed at Companies House.

Have you tried the Kaplan or BPP texts as they seem to cover this quite well.

btw if you file new accounts at Companies House there would be no fine as long as the first set were filed in time.

Nps

Which text books do you use? I used BPP for levels 2, 3 and 4 and have never come across a question that has not been covered in more than enough detail in the text.

My understanding is that AAT write the syllabus and then each provider writes a text which they believe covers the syllabus. I don't think AAT actually write a text book themselves.

Surely your problem is with the text provider not AAT if you believe they have not covered the syllabus in their texts?

wannabebean

Thanks

Thank you.

I will definitely try other text, assuming I bother to finish it with two exams (and a possible re-sit) left to do.

You are correct on the companies house statement. However what we are really talking about here is the time it takes to post the account from completion to posting to companies house. I am a director of a UK Ltd company. Accounts must be filed on time. For a UK Ltd your accounts must be filed 9 months after your year end. Therefore, in light of your illuminating answer, the adjusting events are applied between year end and the nine month statutory filing period - or for a PLC 6 months.

I am happy to ammend my previous statement to say simply that account can be ammended up to teh statutory deadlines outlined above AFTER THE REPORTING period. However, you are wrong to state that accounts, once submitted and signed off, can be changed. THEY CAN NOT.

Perhaps we are getting to the bottom of why accounts in the UK are nearly always overdue or late? Wait as long as you can to file your returns just in case you have to make an amendment that you could have fixed on your next years returns?

Bluewednesday

WE have filed replacement accounts before which have been accepted by Companies House. As long as they have amended in their title they can be refiled.

http://www.companieshouse.gov.uk/infoAndGuide/faq/amendingAccounts.shtml

Usually this is for mistakes though, I can't think of a time where we have refiled due to an adjusting or non adjusting event.

Steve Collings

Hi,

Sorry the exam didn't seem to go as expected - but you don't have to get everything right to pass! Students often pass with a SoFP that doesn't balance and also have a wobble on the IFRS/IAS question.

Re the acquisition first off. The reserves at acquisition (which is usually given to you in the question's notes) all belong to the company's previous owners and will therefore form part of the goodwill calc. The increase since acquisition (post-acq reserves) then gets split between the parent (P's share of the post-acq retained earnings goes into the consolidated retained earnings calculation) and the NCI's get their share so in your case P will get 60% of post acq reserves which will form part of consolidated retained earnings, NCI will get the remaining 40% which will form part of NCIs.

I see your point about adjusting events and Companies House. However, bear in mind that FNST is testing your ability to apply IAS 10. Essentially events can occur between the reporting date and the date on which the financial statements are approved and it is this intervening period which IAS 10 is concerned with. The "traditional" scenario is a customer going bankrupt after the reporting date which then provides evidence of an uncollectible receivable. It will be included in the financial statements as a trade receivable at the reporting date but evidence has emerged since the reporting date that this receivable should be provided for in the current year's financial statements. For the purposes of FNST I think you should forget about Companies House filing etc as the scenario is testing your IAS 10 knowledge therefore you can assume that accounts are not filed with regulatory authorities at the time you are sitting your exam.

Non-adjusting events are events that occur after the year-end but before the accounts are approved. If material, they should be disclosed - not adjusted for - in the financial statements.

I hope this helps.

Best wishes
Steve

wannabebean

Thanks

Thanks Steve - you cleared those two issues up nicely. Have you ever considered writing an AAT course text yourself? Starting with Level 4 FNST!?

Regards

wannabebean

PS - I would like to say put me down for one but i am desperately hoping that I will not need it

The Magician

I had a written question on IAS 10 in my FNST exam.

Steve Collings

wannabebean wrote: »

Thanks Steve - you cleared those two issues up nicely. Have you ever considered writing an AAT course text yourself? Starting with Level 4 FNST!?

Regards

No problem!

I don't have the capacity to write an FNST text book I'm afraid! Writing IFRS For Dummies took up the vast majority of last year and next year will see 3 books of mine published (including another 'For Dummies' one!). I also feel I'm a bit detracted from the syllabus of FNST to do that nowadays.

Don't worry about your results now - relax for the next few weeks and enjoy the freedom

Best wishes
Steve