2013 CAP2 Discussion Group

Kevint30 · 12-12-2013 11:15AM

mmcshane wrote: »

What session is the financial reporting assessment based on? The comp statement didn't specify much unless I just completely missed it

Have a look at page 31 on the competency statement (link below). It clarifies what standards are examinable at the FR assessment. As far as I know only sessions 1 to 6 are examinable.

Regarding consolidation, have a look at the cap 1 competency statement and you will see what is examinable. As far as I know only consolidations in session 6 are on the assessment.

http://students.charteredaccountants.ie/Global/syllabus/CAP2/CAP2%20Competency%20Statement%202013%202014%20FINAL.pdf

Kevint30 · 16-12-2013 10:41AM

case study is up

sarahmcm90 · 16-12-2013 11:08AM

How do u gt it

Kevint30 · 16-12-2013 11:10AM

sarahmcm90 wrote: »

How do u gt it

Under messages and notices. The link is at the bottom of the page

Hopefully this link works

http://students.charteredaccountants.ie/Global/examdocs/SFMA%20Preseen%20Case%20Study%20January%202014.pdf

sarahmcm90 · 16-12-2013 11:29AM

Thanks.. Is ne one round the Longford area r near Longford Sligo or that

Kevint30 · 16-12-2013 03:55PM

Anyone had a look at it yet? I think variances is a definite

y0ssar1an22 · 16-12-2013 03:59PM

I just had a brief look and have jotted down variances as well. I will look in more detail tonight and share my thoughts.

anthonygoodman · 16-12-2013 08:31PM

by the looks of the sfma assessment variances looks likely, any other topics

Noonster · 16-12-2013 10:02PM

Presumably CVP analysis as well. Will have a longer look tomorrow myself as well and see what else jumps out

cluray · 16-12-2013 11:07PM

Investment Appraisal of the 200k in Cocktail Bar, NPV.
This could also bring in:
Sensitivity analysis
Source of Finance/Financing decision for the 200k

y0ssar1an22 · 17-12-2013 10:43AM

Possible things to come up:

MOR has advised there should be 3 investment centers. So possibly work to do on each of these.

1. Investment appraisal for the bar. 200k to invest. Do I understand correctly that expected NPV should be 100k? You can get a start on the revenue side of this with expenditure to be given out on day of exam. Also keep in mind the tax treatment of some items.

2. variance analysis on the restaurant. There will be material and labor variances. They are using marginal costing so only 1 fixed OH variance (F. OH expenditure). There will prob be sales and Variable OH variances as well.

3. accommodation: breakeven analysis, margin of safety, sales to attain target profit. Possibly

4. ROCE is mentioned so possibly calculate this

I dont really know what else. There will be a theory element somewhere. Some of the assumptions I made above may be based on a lack of knowledge.

sarahmcm90 · 17-12-2013 11:06AM

That's a great help.. So true. Those areas are a likely chance

Kevint30 · 17-12-2013 11:13AM

y0ssar1an22 wrote: »

Possible things to come up:

1. Investment appraisal for the bar. 200k to invest. Do I understand correctly that expected NPV should be 100k? You can get a start on the revenue side of this with expenditure to be given out on day of exam. Also keep in mind the tax treatment of some items.

I would have thought the same. Maybe discounted payback will be needed to be calculated as a positive NPV is required within 2 years.

Should Have Done Arts · 17-12-2013 11:29AM

Any Idea of what he means by the Tax treatment

y0ssar1an22 · 17-12-2013 12:02PM

Should Have Done Arts wrote: »

Any Idea of what he means by the Tax treatment

Not yet....but hopefully when I look a bit more in depth

Should Have Done Arts · 17-12-2013 01:15PM

Accelerated capital Allowances surely isnt examinable. That would effect the Depr figure in the investment appraisal.

Or else some expenditure will be capital in nature and some will be expensed as repairs.

y0ssar1an22 · 17-12-2013 01:33PM

On a slightly unrelated note....
tax session 5&6 are in the recorded session folder. They are done by Grainne McDermott.
However, in the course material section there is a separate link to session 5&6 done by a different lecturer.

Anyone know what the story with this is? I suppose its just the same material done by different lecturers?

sarahmcm90 · 17-12-2013 01:39PM

The one done differently n the Dublin 2group.. We do hve recorded lectures as part of our course. Say its same material

Kevint30 · 17-12-2013 02:42PM

Does anyone have an idea what theory in this assessment could be based on? Nothing of relevence has struck me yet.

sarahmcm90 · 17-12-2013 02:46PM

Sources of finance cud be a theory element i think

Should Have Done Arts · 17-12-2013 05:18PM

sarahmcm90 wrote: »

Sources of finance cud be a theory element i think

+1

I am also thinking something on company structures may pop up.

cluray · 17-12-2013 06:59PM

It mentions a few times staff need training in finance, so think there is a good possibility of theory being related to that i.e. explanatory note. Not sure what it might be on yet though.

y0ssar1an22 · 18-12-2013 12:14PM

In relation to tax:

I think this may come up in relation to the NPV calculation. Tax is a cash outflow in the NPV calculation, so we may need to work out what the tax is.
If given the accounting profit (includes expenditure such as depreciation, and other non-tax deductible expenditure) we will need to get the taxable profit. Depreciation is not an allowable expense for tax.

So accounting profit
+ Depreciation
+ other non-tax deductible expenditure (presume this is what they mean in the case study)
= taxable profit
- capital allowances
= overall taxable profit
Tax @ X%

Kevint30 · 18-12-2013 07:41PM

"SW stated he had just received the following profit statement from finance detailing the
performance of the beef stew dish trialled in October 2013. He noted that the contribution
delivered was €/£1,965 lower than he budgeted for.

BEEF STEW - MONTH END STATEMENT
SALES/COSTS €/£

SALES (900 UNITS * €/£10) 9,000
MATERIAL - BEEF (81,000 GRAMS) 3,645
LABOUR - 120 HOURS 1,320
ACTUAL CONTRIBUTION 4,035

SW stated that he was confused by the statement received as it is did not take the form of an
operating statement reconciliation as previously agreed. KF rang finance to question why this was
not sent to SW and was informed that SW had not sent the standards to finance. SW checked his
files, agreed that this was an oversight and agreed to e-mail the standards to KF after the meeting.
Finance confirmed that the summary figures sent were accurate and promised that a full operating
statement reconciliation and financial analysis would be returned to SW within 24 hours of receiving
the standard cost card from SW.

SW stated that he was disappointed; He had expected positive results as he intentionally purchased
inferior cuts of beef (compared to the cuts incorporated into the dish’s standard cost) for use in the
dish during the month and had used trainee chefs to produce the dish. KF assured SW that this was
only a trial month and that the benefits of the system in improving future performance should be
SW’s focus. To that end she assured SW that she will call to finance with the standards to ensure
that the finance team will complete an operating statement reconciliation for the dish for the month
ended October 2013 and that she will task them to work with SW to identify causes of any adverse
figures reported and how they can be corrected in future months"

Above is part of the last two paragraphs of the Assessment. Does anyone think from reading this that the reconciliation will be given to us on the day of the assessment, meaning the variances, would have already being computed.

viv_d · 18-12-2013 07:54PM

Yes I was thinking that the Operating Statement reconciliation may be provided and that we will be given the materials and labour variances and will have to work back to see mix and yield from the cheaper beef they used.

y0ssar1an22 · 18-12-2013 08:17PM

viv_d wrote: »

Yes I was thinking that the Operating Statement reconciliation may be provided and that we will be given the materials and labour variances and will have to work back to see mix and yield from the cheaper beef they used.

are these on the exam?

Kevint30 · 18-12-2013 08:58PM

y0ssar1an22 wrote: »

are these on the exam?

Really don't know, but |I assumed they were

viv_d · 18-12-2013 09:09PM

I checked the competency statement and they are on there overall - the SFMA formal interim assessment just states that this includes CAP1 and "Some new areas from CAP2
(candidates expected to research these areas themselves: self-directed learning)"

If anyone knows anything different can they comment. Thanks.

cluray · 18-12-2013 10:14PM

Can't really ask mix and yield if you only have one ingredient, you need to be given 2 ingredients.

I think you could be asked to prepare the reconcile yourself as you are the management accountant in this hotel.

Kevint30 · 18-12-2013 10:38PM

cluray wrote: »

Can't really ask mix and yield if you only have one ingredient, you need to be given 2 ingredients.

I think you could be asked to prepare the reconcile yourself as you are the management accountant in this hotel.

You're probably right as it says the standard cost card should only include the cost of the main ingredient (meat, poultry or fish), so maybe we will be asked to do the standard cost card for Beef, the various variances for them and then reconcile budgeted to actual. There may also be a theory element about inventory control (because of the poor control over fresh ingredients)

2013 CAP2 Discussion Group

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