From the examiner and I
Use this as your guiding light throughout your FR (F7) course, whether you take it using our online classroom or at your local college.
Ok here goes...
Learn the basics of everything
Notice I said basics - this means just the basic principles of each standard no more.
On the core areas - have a fab technique - again from your local lecturer or use ours in the online classroom - whichever you choose the key is to have a set technique for GROUPS, CASHFLOWS and ACCOUNTS PREP
And over to the examiner "The inclusion of MCQs allows each diet to cover most of the syllabus. This means that it is necessary for candidates to study the whole of the syllabus and not concentrate solely on what are perceived to be 'core' areas"
GROUPS - get a technique
As we stated above this is vital - get one from your study provider and learn it well by practice.
Pay particular attention to treatment of fair values at acquisition, unrealised profit in inventory, goodwill impairment and share for share exchanges.
Over to the examiner who said a common error is using the share price of the subsidiary (instead of parent) when calculating consideration with a share for share exchange and failing to discount deferred consideration
Know your GROUP Income statement BASICS
Here you need to know that:
You add across all lines 100% except dividends received from subs and assocs
You time apportion the sub if purchased/sold during the year
NCI is % of S's PAT
S's PAT may need adjusting and so will NCI
Goodwill impaired goes to H's expenses if the proportionate method is use
Goodwill impaired goes to S's expenses (and so adjusts S's PAT and therefore NCI) if the Fair Value of NCI is used
If there is any discounting - it needs to be unwound and this goes to H's interest
Associates are % of A's PAT
Any adjustment in your FV table e.g.. extra depreciation needs to go to S's figures also (just for the year)
Know your unrealised profit adjustments well
Over to the examiner "The most common error with the finance costs figure was not to include the unwinding of the deferred consideration, and sometimes for those that did account for this, they failed to time apportion the cost.
Most candidates understood the principle of calculating the non-controlling interest, but often made errors with the adjustments for the impairment of goodwill, the additional depreciation and including the unrealised profit (although it was the parent that made the sale).
A slightly worrying error was that some candidates started their calculation with the non-controlling interest used in the calculation of goodwill.
Many candidates prepared a full consolidated statement of profit or loss as well as the specific figures required which only wasted time and earned no additional marks
Ok that's all from me (and the examiner) for today ...
Hope all is going well - and you're enjoying the online classroom.