DFS Suggested Answers - June 2009

Steve CollingsSteve Collings Experienced MentorRegistered Posts: 997
Hi all,

As promised, please find attached my answers to DFS J09 which have been requested by a lot of you.

Sandy Hood and I both do these suggested answers for you, free of charge and in our time in the hope that it will make some of you feel better.

We don't charge, but I would like to ask those of you who use my answers to make a donation to Cancer Research.

Details of Sandy Hood's charity can be found here.

Please feel free to direct any queries either via this forum or via PM.

Good luck.

Regards
Steve

Comments

  • columbiacolumbia Experienced Mentor Registered Posts: 580
    Thanks Steve

    I have decided not to look as tempting as it is!! The exams done and I cannot change the outcome, so best not to wind myself up over it!

    I'm sure a lot of other people will be extremely grateful though, and on their behalf I would like to thank both you and Sandy for your valued contribution!!!
  • alicemaylaraalicemaylara Trusted Regular Registered Posts: 259
    Thanks:001_smile:
  • MOHMEDSALIM PATELMOHMEDSALIM PATEL Well-Known Registered Posts: 184
    every things fine.

    thank you very much.
    every thing o.k.up to task 2.2 i have not done task 2.2 right how much have i lost.

    is it a need worrying ?
  • cs_1988cs_1988 Well-Known Registered Posts: 231
    thank you very much.
    every thing o.k.up to task 2.2 i have not done task 2.2 right how much have i lost.

    is it a need worrying ?



    Mohmedalim,

    Dont worry about it, everyone makes a balls up of one section. As long as you have showed competence you will be fine.

    Relax,

    Chris


    Cheers Steve!
  • Steve CollingsSteve Collings Experienced Mentor Registered Posts: 997
    thank you very much.
    every thing o.k.up to task 2.2 i have not done task 2.2 right how much have i lost.

    is it a need worrying ?

    The marking process is not always as black and white as most students think. Just because you say you have not done task 2.2 right, does not mean you won't get absolutely no credit. There are all sorts of "hidden" marks which you can pick up. My answer is slightly longer than what a student would produce simply because I had more time to write about it than you guys.

    Also remember with discussion style questions, there is always scope to achieve marks even if your answer does not match that of the model answer.

    Kind regards
    Steve
  • angela27angela27 Feels At Home Registered Posts: 40
    Is it just me or is anyone else having problems trying to access the answers? I am asked to log in to get the answers which i have tried several times now and am being told im being redirected but it just keeps asking me to log in, its allowing me to post replys but nothing else. Can anyone send me the answers at all?
  • deb452webdeb452web Just Joined Registered Posts: 2
    Me too, I am getting the same message, can anyone help us another way in viewing the DFS answers?? pleeeeease
  • SandraSandra Settling In Nicely Registered Posts: 20
    Hi Angela and Deb
    I think(!) I have sent you both private messages with my email address on - if you email me I'll reply attaching the answers
    Cheers
    S
  • angela27angela27 Feels At Home Registered Posts: 40
    Hi Sandra, unfortunately i am not even able to read my private messages its the same problem as with trying to access the answers i try to log in but nothing happens all i can do is post replys grrr. Can you email the answers to [email protected] Thanks a mill x
  • Kelly80Kelly80 New Member Registered Posts: 7
    Thanks for this. I think Im fine apart from on 2.1 I said to carry on investing, but to keep an eye on any additional long term loans. Hopefully it wont be enough to fail on!
  • Steve CollingsSteve Collings Experienced Mentor Registered Posts: 997
    Hi,

    If anyone has difficulty in downloading these answers (as they seem to have had today). I have uploaded them also on the AccountancyStudents website.

    From there, if you go to 'discussion forums', then scroll down until you see 'AAT Technician' and you will find the answers as an attachment on there.

    Kind regards
    Steve
  • Steve,

    Just looking at your answers I can see that you have included sales returns in your COS claculation. I took this figure away from my sales revenue.

    The advertising you have included in admin costs rather than distribution. I am sure that on a previous AAT paper, the AAT had put advertsing in distribution.

    I am hoping that either way will not make a difference in the marking for both answers.
  • Steve CollingsSteve Collings Experienced Mentor Registered Posts: 997
    Hi Don,

    In terms of returns in both methods are acceptable. Over the years I have seen examiners take it off sales and other examiners increase cost of sales. The current examiner, I believe, takes it off revenue.

    The similar principle applies to advertising. You could argue it is distribution costs because it is directly attributable to 'distributing' goods/services. Others (including myself) argue that it is an administrative expense (mostly so in practice). Either method would be valid, so don't worry about it.

    Kind regards
    Steve
  • Extra re-assurance

    Hi Steve,

    Just worked through the paper again quickly. I believe that that I have passed but I just wanted to comment on questions I danced around.

    1.4 I spoke a lot about goodwill and that the impairment needs to occur to reflect the true value in the balance sheet. I stated that it is re-valued by revisiting the GW calculation and if the company bought is worth more then the GW needs to be reduced (impaired) to show a true figure. I mentioned that it is to be written off through the reserves.

    2.1 I missed off the times by 100 on my gearing ratio leaving me with decimals for both years. I advised not to invest as the company had taken out a £3m bank loan to maintain profitability. I also said that we should revisit the accounts in a year’s time to see if there is any improvement.

    2.2
    I stated that a current asset was used for trading on a daily basis and usually consisted of inventory, receivables and cash at bank. The balances would change on a daily basis. I said pretty much the same thing about current liabilities but listed payables and accruals.
  • Steve CollingsSteve Collings Experienced Mentor Registered Posts: 997
    I think you've done OK there.:thumbup1:

    Impairments are put through reserves, provided they relate to an asset(s) that has previously been revalued upwards (you can't have a debit balance on a revaluation reserve under IFRS). If it (they) hasn't (haven't) been revalued upwards then it is charged to the income statement as depreciation or as a separate line item (if, for example the impairment is material).

    You are right about goodwill. Goodwill CANNOT be amortised under IFRS so needs annual impairment tests (unlike UK GAAP (FRS 10) which permits amortisation of goodwill).

    Good stuff!!

    Best regards
    Steve
  • GlynisGlynis Trusted Regular Registered Posts: 488
    Steve

    Looking at your answers I seem to have made a mess of the last task. I put down the definition of an asset and a liability.

    Is this in IAS 1? Will I get a fail on this?
    Please help.

    Glynis
  • Steve CollingsSteve Collings Experienced Mentor Registered Posts: 997
    The definition of an asset and a liability is dealt with in the Framework Document rather than IAS 1.

    A number of students have told me that they, too, have put down the definition of an asset and a liability, but unfortunately the two are not the same. The Framework Document (which is not an accounting standard) defines what an 'asset' is and covers both current and non-current assets and the same applies to a 'liability'. IAS 1 follows on from the Framework by prescribing what assets/liabilities need to be classed as a current non-current depending on the nature of the asset/liability concerned.

    As I have said before, the marking process is not black and white as some students think and marks can be picked up even if your answer is incorrect. There is little point worrying about it now because you can't change the paper!! Just relax and enjoy the break!:001_smile:

    Kind regards
    Steve
  • GlynisGlynis Trusted Regular Registered Posts: 488
    Looking at the question I feel the examiner should have been more specific as the wording is confusing.

    I will put that on my feedback form.
  • Steve CollingsSteve Collings Experienced Mentor Registered Posts: 997
    Hi Glynis,

    Hope you don't mind me saying, but I do not agree with you when you say the question is confusing and the examiner should have been more specific. The examiner could not have been any more specific. The question states clearly:

    Write short notes to explain how IAS 1 defines the following terms:

    (a) current assets
    (b) current liabilities


    I am not sure how the examiner could have worded this any more clearer for candidates. I know there are plenty of students on here complaining about questions set by examiners being ambiguous, but in the case of DFS the paper could not have been any clearer.

    Kind regards
    Steve
  • Hi Steve,

    I think she may have been referring to the impairment question.
  • GlynisGlynis Trusted Regular Registered Posts: 488
    Don Juan wrote: »
    Hi Steve,

    I think she may have been referring to the impairment question.

    I was referring to the last task in section 2. I think Steve may have a valid point though
  • He has a very valid point then for 2.2 as it was the easiest task on the paper and couldn't be worded any clearer.
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