Question Two

　　This question dealt with real world scenarios taken from corporate financial statements. It is important that the exam paper reflects actual issues in financial statements and that candidates can apply their knowledge to these scenarios. The first scenario dealt with deferred tax assets and their recognition in financial statements. This part of the question was well answered. Part b dealt with impairment of assets where an entity wished to use a method not in accordance with the standard. It required candidates to apply their knowledge to the situation and not just repeat the rules in the standard. This part of the question was well answered.

　　Part c looked at a situation where a company had a direct holding of shares and the subsidiary issued new shares which were not subscribed for by the holding company with the result that the interest was reduced to that of n associate. The question required candidates to determine whether the results should be presented based on principles provided by IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Candidates performed quite well on this part. The key to success is to set out the principles in the standard and then to apply each one to the case in point.

　　The final part dealt with the existence of a voluntary fund established in order to provide a post-retirement benefit plan to employees. The entity considered its contributions to the plan to be voluntary，and had not recorded any related liability in its consolidated financial statements. The entity had a history of paying benefits to its former employees，and there were several other pieces of information in the question. Candidates had to apply their knowledge of defined benefit schemes to the scenario. It did not require an in depth knowledge of the accounting standard but an ability to apply the principles. The question was answered satisfactorily by candidates.

　　Question Three

　　This question was a case study type question based around a company in the edible oil industry. The company processed and sold edible oils and used several financial instruments to spread the risk of fluctuation in the price of the edible oils. Additionally，the company was unclear as to how the purchase of the brands and certain entities should be accounted for.

　　It involved knowledge of derivatives，hedging and embedded derivatives at a fundamental level. Candidates did not have to apply their knowledge to any degree but simply had to recognise the nature of the various financial instruments involved and discuss their accounting treatment. This knowledge is essential knowledge and will be examined in future diets. Candidates’ answers were satisfactory in the main but few candidates recognised the embedded derivative. The accounting for the brands was quite well answered with many students gaining high marks. The final part required candidates to apply IFRS 3 Business Combinations to a scenario. The answers were often quite poor with the main weakness being the application of the knowledge and the understanding of the nature of the purchase of the entities.

　　Question Four

　　This question required candidates to discuss the reasons why the current lease accounting standards may fail to meet the needs of users and could be said to be conceptually flawed. The second part of the question required a discussion of a plant operating lease in the financial statements met the definition of an asset and liability as set out in the ‘Framework for the Preparation and Presentation of Financial Statements.’Candidates’ answers were quite narrow in their discussion of the weaknesses in the accounting standards. The definitions of asset and liability were well rehearsed and candidates scored well on this part of the question. It is apparent that very few candidates read widely. This question always deals with current issues which mean that a wider reading base is required to achieve a good mark. Accounting and Business，and the student accountant are just two examples of magazines that provide wider exposure to current issues.

　　The final part of the question required candidates to show the accounting entries in the year of the sale and lease back assuming that an operating lease was recognised as an asset in the statement of financial position and to state how an inflation adjustment on a short term operating lease should be dealt with in the financial statements of an entity. The purpose of this question was to show how a change in the current accounting standards （by recognising operating leases in the statement of financial position）would affect their accounting treatment. The question was well answered and candidates scored well generally on this question.

　　ACCA2010年12月考试时间：12月6日-15日

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