DFS - section 1 and 2

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Londina
Londina Registered Posts: 814 Epic contributor 🐘
in AAT Level 4 (Level 8 in Scotland)
Since to pass an exams, 70% has to be done in both sections, I noticed in DFS this split:

Section 1 requires to do journals, a full financial statement, consolidated balance sheet and a cash flow statement

Section 2 requires ratios, an explanation of them and 1 more question


I'm finding these sections so unbalanced!! So much covered in section 1 and little in section 2, you are thinking to cover most of the exams by doing all your journals, FS, cash flows, etc...but actually if you don't pass the ratios, you don't pass the exam?:thumbdown:

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  • lou123
    lou123 Registered Posts: 53 Regular contributor ⭐
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    That's what happened with me! I had a complete blank about the ratios and couldn't remember two of the four requested, so couldn't provide half of the equations or reasons for improvement. Pass on section 1 but big old FAIL on section 2.

    That's why I'm revising for PEV, PCR AND DFS this time!

    Good luck to one and all - fingers crossed for everyone this time :thumbup1:
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
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    This is because the DFS paper is actually split into two component parts.

    Section 1 tests the candidate's ability to draft limited company financial statements and apply accounting standards to both single entity and consolidated financial statements.

    Section 2 tests the candidate's ability to interpret financial statements. So if you can prepare but not interpret financial statements or vice versa, you cannot be deemed 'competent' in the exam.

    Regards
    Steve

    p.s. how do you know the pass level is 70%?
  • Londina
    Londina Registered Posts: 814 Epic contributor 🐘
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    I found this unbelievable....so you spend 125 minutes on section 1 and 55 mnutes in section 2, but that 125 minutes spent is quite irrelevant if you don't pass the 70% of those 55 minutes...

    I understand and agree to the fact that they want to test the ability to draft and interpret financial statements, but can't they balance the time and the tasks required?
  • Londina
    Londina Registered Posts: 814 Epic contributor 🐘
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    Steve Collings wrote: »
    how do you know the pass level is 70%?

    I always heard it was that percentuage, why? am I wrong? it's less?:tongue_smilie:
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
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    There are various %ages that get bandied around on here about what the pass level is - some as high as 80% and then as low as 50%.

    The truth is that the pass level is not set until after the exams have been completed.

    I wouldn't be too concerned about the pass level because you aren't going to be given a % on your results. Concentrate on your revision and try not to concern yourself with how the scripts are marked.

    Regards
    Steve
  • Londina
    Londina Registered Posts: 814 Epic contributor 🐘
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    Steve Collings wrote: »
    Concentrate on your revision and try not to concern yourself with how the scripts are marked.
    Regards
    Steve

    Yes, of course I'm concentrating on my revision, but unfortunately I can't ignore the fact that I have to be competent in both sections, when actually one is 1/3 of the other!
    I'm looking up the last paper, dec 08, task 1.5 in section 1 requires a report with the interpretation of the cash flow statement, this should not be in section 2 since is a written task?
    If someone fails on the interpretation of ratios, at least could be successful with the cash flow report and therefore considered competent?
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
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    Hi,

    Well no - an interpretation of a cash flow statement is a section 1 requirement. The examiner is within his rights to ask a candidate to do this in section 1. He can ask a candidate to: prepare a cash flow statement, prepare part of a cash flow statement or even comment on a cash flow statement.

    Section 2 is generally concerned with putting the candidate in a client/accountant advisory role where the client is wanting to invest in one of two companies and it is up to the accountant to convey to the client what the financial statements are telling the user about the company - hence interpretation.

    Commentary on a cash flow is simply commenting on how an entity has generated and spent its cash in a reporting period or commenting on what has given rise to increases/decreases in working capital - it isn't comparing one company with another (i.e. interpreting 2 sets of financial data) which is typically found in section 3.

    Regards
    Steve
  • Gem7321
    Gem7321 Registered Posts: 1,438 Beyond epic contributor 🧙‍♂️
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    Londina wrote: »
    If someone fails on the interpretation of ratios, at least could be successful with the cash flow report and therefore considered competent?

    How can you be considered competent on this basis? These sections are completely different and you have to be able to do both.
  • heartsandstars
    heartsandstars Registered Posts: 76 Regular contributor ⭐
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    I always thought that in DFS the Section 1 equates to 70% of the exam and Section 2 is 30%, and thats why the section 2 seems to cover less content?
  • JoBo
    JoBo Registered Posts: 16 New contributor 🐸
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    I personaly feel worried about section 2, it feels like a lot of pressure as you only have a couple of questions so need to be able to get them right. Think id feel happier if section 2 was longer with more questions, but then it would be hard to fit it all into 1 exam.
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    heartsandstars wrote: »
    I always thought that in DFS the Section 1 equates to 70% of the exam and Section 2 is 30%, and thats why the section 2 seems to cover less content?

    On any AAT exams ive always been told to treat each section as a seprate exam as you have to get at the very least 70% on each
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
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    Students seem to speculate far too much about getting 70% of section 1 right and 80% of section 2 right to pass the paper.

    None of this has been proved factual. You do not get told what % you have attained in the exam.

    Forget about what you "think" you have to get to pass and just aim to complete the paper in the required time and demonstrate your competence in the exam by applying your knowledge to the scenarios set in both sections. That way you will be deemed competent in the exam!:thumbup1:

    Best wishes

    Steve

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