June 2005 DFS my opinions

System · June 2005

As you know, I have prepared my answers and posted them on the accountancy students forum. I cannot post them on the Groups MSN forum because at the moment, the site is down. I will give you my opinions of the tasks involved. These are my opinions and I do not expect students to necessarily agree with me. Task 1.1 (P&L) This was a straight forward question, no unpleasant surprises. The only area of complication would have been with the calculation of the final dividend as this would have meant calculating how many shares were in issue at the year end, bearing in mind a share subscription was made during the year. Task 1.1 (Balance sheet) Again, lots of easy marks. The only difficulty would have possibly been with the share issue. Task 1.2 The STRGL should not have posed too many problems, thought I suspect a lot of you were not expecting this. The reconciliation of shareholders funds was, I thought, a little cruel but it is in the syllabus. The complexity here was around the opening shareholders funds which would have required a working (as per my answer). Task 1.3 Goodwill calculation is a key consolidation technique and as most of you were expecting a consolidation question, this should have been a gift. Again, no unpleasant surprises here. Task 1.4 Investments in associates are again, key consolidation techniques so no problems here. Task 1.5 and 1.6 Cash Flow Statements are a gift!! I posted two articles on the various forums about cash flow statements, techniques and easy marks available. I would be very very surprised if any well prepared DFS student failed this question. Task 1.7 FRS 12 (provisions etc) are always examined. Again, this should not have posed any problems. Task 2.1 Ratio analysis is a core topic at AAT and therefore this should not have thrown many of you. EPS, I thought, maybe a little cruel, but it is a key ratio and is a figure which is widely used by investors. Task 2.2 Statements of principles are beginning to become a very big thing (especially after Enron, Worldcom etc etc). An unexpected issue, possibly with many students, but something which should have been covered. Finally, these are my opinions having done the paper and posting my answers and it will be interesting to hear your feedback on my opinions. Best regards Steve

System · June 2005

June 2005 DFS my opinions

Hi Steve Could I ask you about how long you took to answer this exam, I mean is 3 hrs and 15 minutes sufficient to complete this exam "bearing in mind the exam stress". In fact I passed DFS last december but found this exam quite tricky, and most of my friends were crying because of it's defficulty and time scale. Appreciating your reply. hussain alasfoor

System · June 2005

June 2005 DFS my opinions

I don't know if I feel better now after reading your answers, but thanks for doing them anyway. I think all my calculations were the same but my theory answers don't sound as intelligent as your answers. Was struggling for time so basic english vocab. was used to get the point across - I hope it is sufficient. Any good at PEV? Thanks Steve - much appreciated.

System · June 2005

June 2005 DFS my opinions

Hi Guys, I will not lie to you - it took me about four and a half hours to do the full paper and then I returned to the answers to correct the cash flow statement - so really all afternoon!! Bear in mind though, I didn't attempt the paper under exam conditions - I took my time so as to be able to post "accurate" answers - though I'm not saying they are 100%. Everything balances but there could still be a couple of errors along the way. You guys didn't have time to do it in a slow and methodical approach so don't be alarmed if your answers are way off mine. You are assessed on your approach, not on the final answer. An email arrived today asking me if you are penalised if your final answer is not correct. You will lose a couple of marks - but on the whole you are marked on your approach and more importantly if you have shown your workings. Again, as the AAT have commented on numerous occasions, a marker cannot give credit if the workings to a figure are not shown. In terms of the post regarding the "intelligence" level of my discursive answers - you are sitting accountancy exams - not English language. You will not lose marks just because the English is not, in your opinion, up to standard. However, professionalism does have to prevail and I would never recommend writing answers in, say, mobile phone text language - which according to the press did happen once!!! Again, I re-iterate, whilst I am confident my answers are within a ballpark figure - I will let you know whether I "pass" when the AAT's answers are published. Watch this, now I will be as nervous as you lot on the 17th August and I thought I'd done all my exams!!!!! Best regards Steve p.s. PEV - definitely NOT my forte!!! I am going to leave all that to Sandy Hood who's the expert. Variances used to be a living hell for me.

System · June 2005

June 2005 DFS my opinions

With regard to the ROCE - in the book it states that it is PBIT (Profit before interest and tax) / Net Assets Also, The STRGL should be Profit before dividends which was 12,538 not Profit for year!! I put for the objective of financial statements the following:- 'The obejective of financial statements is to provide information on a reporting entities financial performance, financial position to a wide range of users for assesing an entities stewardship of management and for making economic decisions'

System · June 2005

June 2005 DFS my opinions

Hi CD, In answer to your post: I have gone back to the original question and my answer. The question asked for return on equity and therefore my formula in the answer is correct. You are correct in your interpretation of the formula for return on assets (or ROCE) but this is not what the question asked for. I have checked the STRGL figure and yes it should be the Ã‚Â£12,538 (apologies for the error) but the rec of shareholders funds is correct. I did, however, say my answers may not be 100% correct - please don't assume they are. Unfortunately, with the STRGL you are not actually balancing to something, but well spotted. I have reviewed the question requirements re the statement of principles and also my answer (I have also had it independently reviewed) and, whilst you do not appear to dispute my answer, it is correct. Your answer also has relevant points in that the question asked for the objectives of financial statements. Please note, with discursive questions there is not a definitive answer available, unlike, say a cash flow question. Your points raised in the answer may be as equally relevant as, say, Joe Bloggs who sat the exam at another centre. Regards Steve

System · June 2005

June 2005 DFS my opinions

 Thanks for these answers Steve. I must say, I found your articles on www.accountancystudents.co.uk most valuable (Especially CFS's and consolidations) and they made me understand the concepts far easier than the textbooks - so thanks. I'd be interested to see the marking matrix for section 2. Section 1 was quite easy going, however personally I could have done a 'helluva' lot better on the statement of principles questions. Quietly confident on the results, so we'll see! Ben

June 2005 DFS my opinions

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