CAP 2 Exams 2012

ted2767 · 20-06-2012 09:15PM

Mark1916 wrote: »

How is everyone doing the consolidation questions? I preferred the t account method but the lack of t account answers for past papers etc are worrying me as my retained earning calcs never really agree to what the answer says!! Is it too late to go to the columner method

Stick to what you know best.

Just pick up the marks as you go along and make sure that any workings are clearly referenced.

And if it doesn't balance just move on and keep picking up the marks.

That will be my approach at any rate.

myshirt · 20-06-2012 09:22PM

I hope to god there isn't a foreign operations question on the Financial Reporting paper.

Guys, the volume of work for these CAP2's is unreal.

I think I am going stone crazy..

How do people feel about the open book thing?
I don't think it is going so well for me - I am terribly organised for a start. Regardless, I can't see myself reading through a folder or a book on the day.

Any time I do out exam questions I barely made the time. So I definitely will not be able to look up something in the exam hall.

I just have a load of mind maps I got online for different topics (one pagers) and some templates for computational questions.

Hopefully it is in the brain somewhere on the day and it will be sparked by the mind map.

EDudder · 20-06-2012 09:32PM

Having 1 paper that isn't open book is a whole head ****.

As much as people say 'study as if you won't have the book' that's impossible to do. You study at a quicker rate knowing you have the back up of referring to the book to remind you if you need it.

And then the one subject that it would actually be helpful to refer to material....is closed book. It's all been said before, but I just can't understand that decision.

Anerak · 20-06-2012 09:41PM

EDudder wrote: »

That's just my opinion/ approach btw.

I'd be interested to hear other peoples insight.

On another note - Am I right in hearing that tax usually has the highest pass rate? How in the hell is that? It's the one that I'm fully expecting to fail miserably.

No I agree,
Tax is generally high but last year results for passing in Summer were Audit 66%, SFMA 62%,FR 56% & Tax 64% but Tax(NI) was 77%

ferike1 · 20-06-2012 09:45PM

Anerak wrote: »

EDudder wrote: »

That's just my opinion/ approach btw.

I'd be interested to hear other peoples insight.

On another note - Am I right in hearing that tax usually has the highest pass rate? How in the hell is that? It's the one that I'm fully expecting to fail miserably.

No I agree,
Tax is generally high but last year results for passing in Summer were Audit 66%, SFMA 62%,FR 56% & Tax 64% but Tax(NI) was 77%

Tax being closed book is especially stupid when you consider faes are all open book

EDudder · 20-06-2012 10:13PM

And the fact that any tax office in the world is littered with Tax books.

Who wants your tax specialist to refer to recent legislation when you can get one that can still remember bits and pieces from their out dated CAP2's?

lauma · 21-06-2012 10:50AM

Spent so much time on hedging and still can't do them . Any suggestions on How to approach these type of questions ?

Anerak · 21-06-2012 10:53AM

lauma wrote: »

Spent so much time on hedging and still can't do them . Any suggestions on How to approach these type of questions ?

Same as you just can't seem to get it right no matter how much time i spend on it.

Clarise123 · 21-06-2012 03:56PM

Hi Guys,

In regards to SFMA Variances, it says in the Competency Statement - 'planning and operational variances for material, labour and sales'.

Has anyone ever come across P&O Variances for sales and if so what it the formulae? Or do they exist?

I would be grafeful for any comments/replies!

ted2767 · 21-06-2012 04:00PM

Clarise123 wrote: »

Hi Guys,

In regards to SFMA Variances, it says in the Competency Statement - 'planning and operational variances for material, labour and sales'.

Has anyone ever come across P&O Variances for sales and if so what it the formulae? Or do they exist?

I would be grafeful for any comments/replies!

Never seen it asked but basically for operational you compare what actually happened against the new standard.

For planning then just compare new standard to old standard if the new standard brings in less/more its adverse/favorable.

Hope that helps

Anerak · 21-06-2012 04:36PM

Clarise123 wrote: »

Hi Guys,

In regards to SFMA Variances, it says in the Competency Statement - 'planning and operational variances for material, labour and sales'.

Has anyone ever come across P&O Variances for sales and if so what it the formulae? Or do they exist?

I would be grafeful for any comments/replies!

I have never come across them either only ever did material & labour in our lectures

Clarise123 · 21-06-2012 07:04PM

ted2767 wrote: »

Never seen it asked but basically for operational you compare what actually happened against the new standard.

For planning then just compare new standard to old standard if the new standard brings in less/more its adverse/favorable.

Hope that helps

Hi,

Thanks for that. I was thinking that maybe there are other formulae for Sales P&O. The above makes sense!

ted2767 · 21-06-2012 07:22PM

Clarise123 wrote: »

ted2767 wrote: »

Never seen it asked but basically for operational you compare what actually happened against the new standard.

For planning then just compare new standard to old standard if the new standard brings in less/more its adverse/favorable.

Hope that helps

Hi,

Thanks for that. I was thinking that maybe there are other formulae for Sales P&O. The above makes sense!

Well basically for op variances all you are doing is comparing op performance against the revised standards.
For planning its all about comparing the old and new standard.
Glad to help.

ecos88 · 21-06-2012 09:09PM

Hi guys,

was wondering if someone could help, im just looking at FR q1 in the autumn 2011, I done the question out myself and then had a look at the solutions posted by the institute. Can anyone tell me how they got the figure of €4,544 in the NCI of Cattle at the date of acquisition? I got €4,994?? I must have missed something, its probably something very obvious.

(also anyone notice this in the solution in working 5 for consolidated R/E)

"Group share of post acquisition element of CATTLE’s
retained earnings
(3,130+ 420 -1,985) * 60% 687

Amazing how the institute cant even tot their figures correctly on the solutions!!!

ted2767 · 21-06-2012 09:31PM

ecos88 wrote: »

Hi guys,

was wondering if someone could help, im just looking at FR q1 in the autumn 2011, I done the question out myself and then had a look at the solutions posted by the institute. Can anyone tell me how they got the figure of €4,544 in the NCI of Cattle at the date of acquisition? I got €4,994?? I must have missed something, its probably something very obvious.

(also anyone notice this in the solution in working 5 for consolidated R/E)

"Group share of post acquisition element of CATTLE’s
retained earnings
(3,130+ 420 -1,985) * 60% 687

Amazing how the institute cant even tot their figures correctly on the solutions!!!

For goodwill remember the nci only owns 10% pref shares

osc 5000
shr prem 1000
fair value adj 3000
ret e 1985
10985 x 40% = 4394
Pref shares 1500 x 10% = 150
Total 4544

As for retained earning it should read (3130 - 30 - 1985 + 420) x 60% = 921

That should do it for you

lauma · 21-06-2012 09:42PM

ecos88 wrote: »

Hi guys,

was wondering if someone could help, im just looking at FR q1 in the autumn 2011, I done the question out myself and then had a look at the solutions posted by the institute. Can anyone tell me how they got the figure of €4,544 in the NCI of Cattle at the date of acquisition? I got €4,994?? I must have missed something, its probably something very obvious.

(also anyone notice this in the solution in working 5 for consolidated R/E)

"Group share of post acquisition element of CATTLE’s
retained earnings
(3,130+ 420 -1,985) * 60% 687

Amazing how the institute cant even tot their figures correctly on the solutions!!!

My understanding is : share capital 5000 + premium 1000+1985 RE + 3000 FV =10985@40% + 150 pref shares = 4544

lauma · 21-06-2012 09:46PM

Sorry posted the same solution didnt see ted's reply

ecos88 · 21-06-2012 09:49PM

Thanks guys

My head is fried, completely missed that!!

Shane732 · 21-06-2012 10:50PM

lauma wrote: »

Spent so much time on hedging and still can't do them . Any suggestions on How to approach these type of questions ?

Ehhh.... what is there in hedging to do?!

A couple of quick calculations and theory - I didn't really think there was a whole load of stuff in hedging.

EDudder · 21-06-2012 11:05PM

I've noticed one of the past paper solutions deals with interest rates hedging in a very weird way. I've decided to ignore the solution. Too many mistakes in other solutions to base my method on one.

lauma · 21-06-2012 11:20PM

Shane732 wrote: »

Ehhh.... what is there in hedging to do?!

A couple of quick calculations and theory - I didn't really think there was a whole load of stuff in hedging.

Well for me it is a disaster anyway.I read the chapter maybe three times at this stage and still can't do questions without looking at solutions .

DonnaDarko09 · 21-06-2012 11:38PM

In the same boat, can't get my head around hedging at all, if anyone has some guidance on how to approach would be much appreciated!

Shane732 · 22-06-2012 08:56AM

lauma wrote: »

Well for me it is a disaster anyway.I read the chapter maybe three times at this stage and still can't do questions without looking at solutions .

The chapter is pretty poor in fairness.

Looking at past papers it's a very unusual paper.

Tricky1979 · 22-06-2012 09:54AM

Can somebody PLEASE help - very confused.

For the indirect method the standard layout starts with the 'Profit before taxation' under Cash flows from operating activities.

However, looking at solutions to q's, (i.e. Monkey and Sword) the solutions always start with the Operating Profit when calculating Net cash flows from operating activities.

Please can somebody clear this up for me?

HeinekenTicket · 22-06-2012 10:18AM

Tricky1979 wrote: »

Can somebody PLEASE help - very confused.

For the indirect method the standard layout starts with the 'Profit before taxation' under Cash flows from operating activities.

However, looking at solutions to q's, (i.e. Monkey and Sword) the solutions always start with the Operating Profit when calculating Net cash flows from operating activities.

Please can somebody clear this up for me?

Starting with 'profit before taxation' is the more common approach.

However, it is acceptable to start with either profit before taxation or operating profit.

Tricky1979 · 22-06-2012 10:26AM

Thks HeinekenTicket!

One final q on this depending on your approach how then to you treat loss or profits on disposal etc ?

lauma · 22-06-2012 10:41AM

Tricky1979 wrote: »

Thks HeinekenTicket!

One final q on this depending on your approach how then to you treat loss or profits on disposal etc ?

Add back or deduct any loss/profit generated from disposal of non-current
assets, or from non-operating activities, as this will be treated under the
Investing or Financing activities.

Tricky1979 · 22-06-2012 10:44AM

Gotcha - cheers

lauma · 22-06-2012 10:48AM

Tricky1979 wrote: »

Can somebody PLEASE help - very confused.

For the indirect method the standard layout starts with the 'Profit before taxation' under Cash flows from operating activities.

However, looking at solutions to q's, (i.e. Monkey and Sword) the solutions always start with the Operating Profit when calculating Net cash flows from operating activities.

Please can somebody clear this up for me?

take a look at this maybe you will find useful

HeinekenTicket · 22-06-2012 10:59AM

Tricky1979 wrote: »

Thks HeinekenTicket!

One final q on this depending on your approach how then to you treat loss or profits on disposal etc ?

simple example to illustrate the general difference:

operating profit (EBIT) 100
finance charge -10
profit before tax 90

If you started the cash flow with profit before tax of 90, you would add back the finance charge as part of the calculation of cash generated from operations.

If you started the cash flow with operating profit (100), you would not have to adjust for the finance charge because the finance charge is not part of the calculation of operating profit, i.e. it is deducted only after the calculation of operating profit.

When you are considering whether you need to adjust the profit figure or not for items included in the income statement (which seems to be your question), you check whether the amount (finance charge, profit/loss on disposal or whatever) is part of the calculation of the profit that you started with at the top of the cash flow. If it is, then you adjust for it. If it is not, then you don't.

Off the top of my head, amounts that would be included in profit before tax but not included in operating profit would be the finance charge, share of profit/loss of associate, profit/loss on disposal, perhaps impairment charges.

You can see from example above that, when you start with profit before tax, you are working your way back through operating profit anyway to ultimately get to cash flow from operating activities. Starting with the operating profit, if given, shortens the distance to the cash flow from operating activities figure, which is why I would start with the operating profit figure.

CAP 2 Exams 2012

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