ACCA P3 - Struggling already :(

Rozzi Rainbow

Hi everyone

I only started P3 last week and I'm already struggling with it I'm self studying from the BPP textbook, which I've managed fine with for a few previous papers, but so far I've only got through the first chapter and feel like I've learnt nothing! It might as well be written in Greek. It just jumps straight in with all these business terms that I haven't got a clue about - I work in a small practice where no-one ever considers strategy, not at this level anyway.

Does anyone have any helpful tips please? How have other people passed? Is the Kaplan book any better? Are there any other books you can recommend? Maybe I should forget all the rubbish at the beginning of the book for now and jump to a later section? I've just investigated the BPP classes in September, as if I still feel like this then I may go just to get someone to explain it all to me. I found F8 and P1 tricky, but I think those textbooks eased me in a bit more gently so I didn't feel too bad at the start, and managed to blag my way through the exam somehow. I've made the mistake of looking at June's P3 exam paper and am now thinking how on earth am I going to do that!!!

Thanks for reading.

Nps

I know you're ahead of me, so I may (probably) have no idea about how difficult P3 is, but, I think it's worth reading the book to the end with the expectation that you may not understand much of it. Then go back and start again properly. Hopefully you will have picked bits up on the way which help to put the first bits into context. I know I've read early chapters, thinking "what the hell????" but then once I've read the whole syllabus, the harder bits just don't seem as bad.

If you've managed this far without help, then you clearly have the ability. And if you do need extra help, then just think of all the money you saved by self studying the earlier exams to justify the expense. That was always my intention, self study up to F9, then give the P papers a go, but always with the expectation that I may need to consider some kind of distance learning for those.

I also think trying another publisher is worth trying first, BPP and Kaplan seem to approach the subjects and explain them so differently that you may find the other one just clicks for you.

Nps

Oh, and surely you'd have to be some kind of freaky genius to understand a word of an exam paper you haven't read the text book for! :001_tongue: (i couldnt find a tongue in cheek smiley face!) Thats a sure fire way to dent your confidence!

Rozzi Rainbow

Thanks a lot for the confidence boost I do feel a bit better now I've stopped studying for the day. I think I need to change tactics a bit now I'm on the P papers - I've always felt the need to really study the textbook to make sure I understand it as much as I can. I've learnt from P2 that question practice really is key - the same style of questions kept coming up and reading the model answers really helped my revision and which parts to focus on. I think I'm going to try and go through the textbook quicker than first planned, try not to worry too much about the (large!) parts I don't understand, and focus more on question practice.

I only looked at the exam paper to try and get an idea of the format and that's what scared me - 2 very open ended questions to start with worth 18 marks each and I thought where would you even start!

Never mind P2 being "The Beast", I'd rather take that exam any day over P3!!! Any further comments would still be appreciated.

Richard

It's been a couple of years since I did P3, but I do remember that I studied it at the same time as P5. There is a lot of crossover between these papers, so I found that I was reading a lot of the topics twice, which helped with the learning.

Also, I'm assuming, (due to you posting on here), that you have passed AAT - if I remember correctly, P3 includes some assumed knowledge from some of the F papers that we, as AAT qualified, would have been exempt from taking. Maybe it is worthwhile buying a textbook for the exempt paper to refer to and give you a foundation for P3.

Rozzi Rainbow

Thanks Richard. I was wondering where all the people who'd taken P3 had gone! Yes, I was exempt from F1-3. I did look at those to see if it was worth getting a textbook as a starter for P3, but couldn't figure out which of those three papers has the assumed knowledge!

I feel as though I'm getting on a little bit better now, the textbook language has improved slightly. And there's a little bit more to do now, not just constantly reading text and making notes, so I'll carry on trying to plough through!

mark057

Hi Rozzi,

I noticed you mentioned F8 in relation to your P3 studies. Are those papers connected?

Did you find F8 a real struggle to complete?

Mark

Rozzi Rainbow

Hi Mark

No, I don't think they are connected, I think F8 leads into P1 more. I'm not sure yet exactly which paper/s connect into P3! I only mentioned F8 as I self studied that one as well and found it a bit of a struggle, but found the start of P3 worse. I wouldn't say I really struggled with F8 exactly as I did pass first time, it was more of me not really knowing what on earth I was meant to be doing!!! Clearly enough sank in for me to write something sensible on the day though.

P3 is slowly getting better, I think the BPP book just started with completely the wrong area, enough to really put me off!!

mark057

Hi Rozzi,

I've got the P papers to look forward to.

I'm struggling a bit on F9. I've come up to the futures contract in relation to hedging exchange rate risk.

I can't understand why futures contracts are sold then bought to hedge the risk???

Mark

Rozzi Rainbow

It's been over two years since I studied F9 so someone studying now, or more recently, should be able to give you a better idea on this. Hedging was the part of P2 I struggled with most, luckily it's only a really small part and didn't come up in the exam! I think the main idea with hedging is to have some idea what you're going to pay/receive in the future even if the markets suddenly change. Because you've already bought the futures contract, you know how much you'll be able to sell it for, to offset any exchange differences. I don't think I've explained that too well!

mark057

Thanks Rozzi,

I've been looking on the web and from what I can see an exporter would enter into a futures contract to sell a foreign currency at a particular rate at a specified period in time.

I just can't work out if the exporter buys futures contracts too.

I'm sure I'll work it out.

Mark

stevef

Hededging is all about reducing risk, and accountants hate risk.

Say you have made a decision to buy goods from overseas, to pay for the goods you will have to buy some foreign currency. You have worked out that at todays conversion rate the purchase is within budget. But you have not ordered the goods yet and you are not going to pay until delivery, you do not have to buy the foreign currency until sometime in the future.

Here is the risk, you can afford the goods now, but if the exchange rates move against you the foreign currency becomes more expensive, will the purchase still be within budget. So you hedge against the risk by entering into either a forward contract or a forward option to buy the foreign currency at a future date at a price you agree today. With the contract, it does not matter what happens on the spot market because you have a fixed exchange rate when you buy. If you have bought an option, if rates move against you, you can exercise the option to fix the rate. If the exchange rates move so that the foreign currency becomes cheaper you let the option lapse.

It all works t'other way around if you are an exporter, you will hedge by taking out a forward ccotract or option to sell foreign currency at a future date at a rate you agree today, so when you eventually get paid you know how that will convert into sterling.

There is a cost in entering into hedge deals and this is the value of the risk - is it worth paying the cost of the deal to eliminate risk?