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FAE 2011 Where to begin

FAE_UCH

Hello all,

This thread may be a little premature but after that disaster of a paper on Saturday, I figure i better start doing a bit now while i'm still slightly in study mode. I did a masters so i feel at a huge disadvantage as i did not have to come through CAP 2. Is there any point in me now going back and trying to look at CAP2 material or would that be much too technical for this.

Does anyone know what the best plan of attack to study this? I'd love to hear past Faer's advice, or people who have a plan to share it with us.

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eoferrall

Wrecked007 wrote: »

Is ISA 700 examinable, i beleive we were told it wasnt, yet we did it at induction and Mr Murray had us highlight a whole pile of stuff on it? It is on the competancy statement?

The new one isn't the old one is.

Wrecked007

so u say we need to bring in the old apb book as well

Wrecked007

wonder why he went through the one in the current apb book then?

luco123

Wrecked007 wrote: »

so u say we need to bring in the old apb book as well

In the resource pack the ISA 700 that is examinable is in it. use that one, not the one in the auditing standards book we have this year.

eoferrall

luco123 wrote: »

In the resource pack the ISA 700 that is examinable is in it. use that one, not the one in the auditing standards book we have this year.

people repeating didn't get an updated resource pack, we have to bring in a the old standards or print it off ourselves!;)

Colts

Ah there's nothing like the feeling of going through a comp paper, then looking at the solution and seeing that you've answered so much incorrectly!

Not looking forward to the comp paper most, at least for sims you can put stuff out of your head and deal with one case at a time. Trying to link up things from a paper over the course of over 4 hours isnt something I'm looking forward to!

Fae1234

RidiculousHair wrote: »

Q1 answered above somewhere, yes, is the answer methinks

Q2 - SD exemption only available if passing under will per s113 of SDCA i think, passing under instestacy would give rise to charge, unless could pass by delivery or other exemption apply

Q3 - on the RR, there is no limit on transfer to children, only a clawback if disposed of within 6 years. If the clawback applies, it may still be possible to claim 3rd party RR as the child is effectively treated as a 3rd party (ie 750k limit applies, though no clawback).

Hope that helps....

Thanks a million, still a bit confused about the solution from Sims 1 Mock 2010 elective as it seems to imply that if he made a further disposal to his children after making a disposal to an unrelated third party (which came within the €750,000 limit) the retirement relief on the third party transaction could be clawed back!

So confusing, anyone done this that can help?

lisa39

eoferrall wrote: »

people repeating didn't get an updated resource pack, we have to bring in a the old standards or print it off ourselves!;)

Or use Technical Handbook, which ever is lighter!!!

eoferrall

luco123 wrote: »

Thanks ab04,

One quick thing though, how do they then get the €79,234 for year 2?

luco123 wrote: »

Sorry to annoy you now ab04, i really appreciate your help though.

im not getting the answer per the solution.

154932* 48% =74,367 per the solution €79,234.

ab04 wrote: »

apologies realised i didnt answer your question. having looked at it again, i've no idea where the 79K came from. every other year it goes up by 8%, but in that year it goes up by more. Sorry!

RidiculousHair wrote: »

Had the same problem with that question, still don't know where the hell they pulled the figures after year one from....surely not another mistake from the Institute????

79k comes from the following:
Profit increase 1: 154932*40%= 61973, therefore profit is 216,905 (61,973+154,932)
profit increase 2 (yr on yr): 216905*8%=17,352, thus total increase over current profit levels for year two is 61973+17352=79,325.
profit yr 3: (216905+79325)*8% = 23,698 (profit in yr 3 over yr 2 p), 23,698+61973=85,670

Edit: thought of an easier way to explain it!
yr1: 154,932*40%=61972, total profit for yr2 is 216,904
yr2: (216904*(1+8%))=234256, to get increase minus 154,932 = 79,324
Yr3: 79,324*108%=85,670
yr4: 85,670*108%=92,523

its not 48% as the profits are increasing 8% PER YEAR, ie compound increases, adding 8% to 40% will give you a straight line increase

eoferrall

lisa39 wrote: »

Or use Technical Handbook, which ever is lighter!!!

forgot it was in that also, good point! bring that so! the old one can continue propping up my desk lamp... its done it all summer why stop now!:D

ohgodd

eoferrall wrote: »

forgot it was in that also, good point! bring that so! the old one can continue propping up my desk lamp... its done it all summer why stop now!:D

is the isa 720 in the current book the wrong one too do you know?

eoferrall

ohgodd wrote: »

is the isa 720 in the current book the wrong one too do you know?

when you say current, the 2010 one? yeah it is for the exams, but you have it provided to you in resource pack.

ohgodd

eoferrall wrote: »

when you say current, the 2010 one? yeah it is for the exams, but you have it provided to you in resource pack.

yeah i mean the 2010 one. i only have the isa 700 in my resource pack,we meant to have isa 720 in there too???

Student456

AAA Elective

Does anyone know if we were given notes on the APB Bulletin 2006/5 - The Combined Code on Corporate Governance......

Can't find any online

MW2011

In the Sim 2 it says that Retirement Relief might not be available if the Devaneys sell the assets and not the shares.

Does anyone know why this is? Surely the Retirement Relief would apply to the sale of qualifying assets?

RidiculousHair

MW2011 wrote: »

In the Sim 2 it says that Retirement Relief might not be available if the Devaneys sell the assets and not the shares.

Does anyone know why this is? Surely the Retirement Relief would apply to the sale of qualifying assets?

Had a quick look at the solution to that, don't see where it says that, unless i've totally missed something. If the company did an asset sale, then company would pay ct on the gain, though retirement relief would be available on extraction if liquidated, assuming they wait till they're 55, and liquidation within 6 mths of asset sale etc

eoferrall

MW2011 wrote: »

In the Sim 2 it says that Retirement Relief might not be available if the Devaneys sell the assets and not the shares.

Does anyone know why this is? Surely the Retirement Relief would apply to the sale of qualifying assets?

no retirement relief is only on the shares, not the assets. it is a deferral exemption of the CGT liability on the company within not the assets. if they sell the shares they pay CGT, ie once cash enters their hand they pay CGT.

in the question, if they sell the assets then they pay cgt on them, but they still own the company. even if it is a shell one, ie they have not retired from the company.

Edit: was thinking of transfer of a business relief - and that's why you shouldn't trust a randomer on the net!

Madeline M

MW2011 wrote: »

In the Sim 2 it says that Retirement Relief might not be available if the Devaneys sell the assets and not the shares.

Does anyone know why this is? Surely the Retirement Relief would apply to the sale of qualifying assets?

Retirement relief is only available to an individual - not to a company or a trust. So if it is a sale of assets in an company then it is a company making the disposal and not an individual so retirement relief doesn't apply.

The only way retirement relief would apply to an asset sale is if the seller is an individual/sole trader.

Retirement relief is not a deferral of CGT, it is a complete exemption and the individual does not have to actually retire to qualify.

Re sale of assets prior to company going into liquidation- the shares won't qualify as "qualifying assets" as the co will no longer be trading so retirement relief not available BUT by concession Revenue allow retirement relief to apply once the co assets have been sold not more than six months prior to liquidation.

limklass2011

okdune wrote: »

Here you go, knock yourself out.

Hey Re the Flexum Question, anyone can help where the 25,760 hours comes from, thanks

Got it now...

MW2011

Madeline M wrote: »

Retirement relief is only available to an individual - not to a company or a trust. So if it is a sale of assets in an company then it is a company making the disposal and not an individual so retirement relief doesn't apply.

The only way retirement relief would apply to an asset sale is if the seller is an individual/sole trader.

Retirement relief is not a deferral of CGT, it is a complete exemption and the individual does not have to actually retire to qualify.

Re sale of assets prior to company going into liquidation- the shares won't qualify as "qualifying assets" as the co will no longer be trading so retirement relief not available BUT by concession Revenue allow retirement relief to apply once the co assets have been sold not more than six months prior to liquidation.

Cool Cheers. Considering you seem on the ball can you help with a company valuation Q.

When you are valuing the company using a multiply of P/E would you always apply the P/E multiply to profits AFTER tax?

And also in the MechElec Q regarding the discounted cash flow, why are they adding back depreciation and calling it Capital Expenditure??? (IGNORE explains it in the solution)

SL10

Student456 wrote: »

AAA Elective

Does anyone know if we were given notes on the APB Bulletin 2006/5 - The Combined Code on Corporate Governance......

Can't find any online

This is in the student technical handbook and also think it is in the APB book

RidiculousHair

MW2011 wrote: »

Cool Cheers. Considering you seem on the ball can you help with a company valuation Q.

When you are valuing the company using a multiply of P/E would you always apply the P/E multiply to profits AFTER tax?

And also in the MechElec Q regarding the discounted cash flow, why are they adding back depreciation and calling it Capital Expenditure??? (IGNORE explains it in the solution)

Yes, if using p/e, then my understanding is it's always profit after tax, this would be because the p/e ratio is usually calculated on after tax profits

Re mechelec, there is an assumption in there where they are assuming capita exp is going to equal depreciation, which tbh, would never have included myself. Just goes to show some of these crazy assumptions that are being made in some of these sols!

Madeline M

MW2011 wrote: »

Cool Cheers. Considering you seem on the ball can you help with a company valuation Q.

When you are valuing the company using a multiply of P/E would you always apply the P/E multiply to profits AFTER tax?

And also in the MechElec Q regarding the discounted cash flow, why are they adding back depreciation and calling it Capital Expenditure??? (IGNORE explains it in the solution)

To value one share in a company using the P/E ratio => EPS *P/E ratio

In calculating the earnings figure for EPS you use earnings attributable to ordinary shareholders i.e. earnings after preference dividends, tax and interest

So to value an entire company => (EPS* no. of shares) * P/E ratio i.e. Earnings * P/E ratio

...... so to answer ur question - I'd always use P/E ratio * earnings after preference dividends, tax and interest

RidiculousHair

Lads (and ladies, of course), think i've prob said this before, but is anybody else pretty worried about time for these exams?? I know they're professional exams and the sols we have are written for highly comp etc, but trying to plan and write down an answer legibly is going to be a serious struggle for me, not to mention the likelihood of something random comin up that i'll not have a clue about and not have time look up....

To cope with all this ****e, me thinks a sneaky pint may be in order tonight, but just one....

tt0717

Very worried about timing in exams too, consider I have not been able to finished any of those case studies within the suggest time (not once)!

For the Comp I think there will be 7-9 indicators (please correct if I am wrong)? So if there are 9 indicators we will have about 26 mins for 1 indicator, ignoring the 30 mins reading time (and I wouldn't be able to finish reading in 30 mins anyway!)

For the Sim I think its 3-5 indicators for 1 sim? So if the max of 15 indicators came up (which I hope not) we will only have 16 mins for 1 indicator, not to mention time needed for planning, looking out for the indicators etc....:eek:

MW2011

with regards timing. I think the efficient use of the reading time is going to be key. I would advise having a plan of how you are going to use that before going in

ahtfulal

I'll spend half an hour reading, half an hour planning then tear into the beast!

limklass2011

RidiculousHair wrote: »

Lads (and ladies, of course), think i've prob said this before, but is anybody else pretty worried about time for these exams?? I know they're professional exams and the sols we have are written for highly comp etc, but trying to plan and write down an answer legibly is going to be a serious struggle for me, not to mention the likelihood of something random comin up that i'll not have a clue about and not have time look up....

To cope with all this ****e, me thinks a sneaky pint may be in order tonight, but just one....

I think a well earned glass of wine will go down a treat tonight..

ABCxyz 123

Anyone have the Question please?

Only found solution up on boards

RobFitzBDF2005

hi guys,

im sit exams on tuesday haven't done much yet, where u think i should start?

thanks guys.