TÀI LIỆU ÔN THI ACCA MỚI NHÂT 2015 BPP p2 examkit

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Practice & Revision Kit

Paper P2
Corporate Reporting (International and United Kingdom)
This Kit provides material specifically for the practice One of a suite of products supporting Paper P2
and revision stage of your studies for Paper P2
Corporate Reporting, for use independently or as part
Corporate Reporting that has been comprehensively
of a package, this Kit is targeted at ACCA’s exams up
reviewed by the ACCA examining team. This
to June 2015 and contains:
unique review ensures that the questions, solutions
• Banks of questions on every syllabus area
and guidance provide the best and most effective
• Answers with detailed guidance on approaching
resource for practising and revising for the exam.
 questions
• Three mock exams with full answers and guidance

Corporate Reporting

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ACP2(INT)RK14.indd 1-3

6/5/2014 8:49:18 PM


PAPER P2

P
R
A
C
T
I
C
E

CORPORATE REPORTING
(INTERNATIONAL AND UNITED KINGDOM)

&

BPP Learning Media is an ACCA Approved Learning Partner – content for the ACCA
qualification. This means we work closely with ACCA to ensure our products fully

prepare you for your ACCA exams.

R
E
V
I
S
I
O
N

In this Practice and Revision Kit, which has been reviewed by the ACCA examination
team, we:


Discuss the best strategies for revising and taking your ACCA exams



Ensure you are well prepared for your exam



Provide you with lots of great guidance on tackling questions



Provide you with three mock exams



Provide ACCA exam answers as well as our own for selected questions

Our Passcard and i-pass products also support this paper.

FOR EXAMS UP TO JUNE 2015

K
I
T


First edition 2007
Eighth edition June 2014
ISBN 9781 4727 1108 3
(previous ISBN 9781 4453 8001 8)
e-ISBN 9781 4727 1172 4
British Library Cataloguing-in-Publication Data
A catalogue record for this book
is available from the British Library

Published by
BPP Learning Media Ltd
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All our rights reserved. No part of this publication may be
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any form or by any means, electronic, mechanical,

photocopying, recording or otherwise, without the prior
written permission of BPP Learning Media Ltd.

We are grateful to the Association of Chartered Certified
Accountants for permission to reproduce past
examination questions. The suggested solutions in the
practice answer bank have been prepared by BPP
Learning Media Ltd, except where otherwise stated.

Printed in the United Kingdom by Ricoh UK Limited
Unit 2
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RH1 3LG
Your learning materials, published by BPP Learning
Media Ltd, are printed on paper obtained from
traceable, sustainable sources.

ii

©
BPP Learning Media Ltd
2014


Contents
Page

Finding questions
Question index .................................................................................................................................................................. v

Topic index .................................................................................................................................................................... viii

Helping you with your revision ..................................................................................................................... ix
Passing P2
Revising P2....................................................................................................................................................................... x
Passing the P2 exam........................................................................................................................................................ xi
Exam information ........................................................................................................................................................... xiii
Analysis of past papers .................................................................................................................................................. xiii
Exam update.................................................................................................................................................................... xx
Useful websites ............................................................................................................................................................. xxii

Questions and answers
Questions..........................................................................................................................................................................3
Answers ..........................................................................................................................................................................95

Exam practice
Mock exam 1

Questions ............................................................................................................................................................325

Plan of attack .......................................................................................................................................................333

Answers...............................................................................................................................................................334
Mock exam 2

Questions ............................................................................................................................................................353

Plan of attack .......................................................................................................................................................363

Answers...............................................................................................................................................................366

Mock exam 3 (December 2013)

Questions ............................................................................................................................................................387

Plan of attack .......................................................................................................................................................399

Answers...............................................................................................................................................................401
ACCA's exam answers

June 2013............................................................................................................................................................419

December 2013 ...................................................................................................................................................435

Mathematical tables ..........................................................................................................................................449
Review form

iii


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iv

Finding questions


Question index
The headings in this checklist/index indicate the main topics of questions, but questions often cover several
different topics.
Questions set under the previous syllabus Advanced Corporate Reporting paper are included because their style and
content are similar to those which appear in the P2 exam. The questions have been amended to reflect the current
exam format.
Time

Page number

Marks

allocation
Mins

Question

Answer

Part A: Regulatory and ethical framework
Financial reporting framework
1

Conceptual framework (12/07, amended)

25

45

3

95

2

Accounting standards and disclosure (12/08)

25

45

3

97

3

Lizzer (6/13)

25

45

4

100

4

Venue (12/11, amended)

25

45

5

103

25

45

5

107

–

–

7

109

Environmental and social reporting
5

Glowball (ACR, Pilot paper)

Part B: Accounting standards
6

Preparation question: Sundry standards

Non-current assets
7

Key (12/09)

25

45

8

112

8

Prochain (ACR, 6/06)

25

45

9

115

9

Johan (12/08)

25

45

10

117

10

Scramble (12/11)

25

45

11

120

Employee benefits
11

Preparation question: Defined benefit plan

–

–

12

123

12

Macaljoy (12/07, amended)

25

45

13

124

13

Savage (ACR, 12/05, amended)

25

45

14

127

14

Smith (6/09, amended)

25

45

15

128

Income taxes
15

Cohort (ACR, 6/02, amended)

22

40

16

131

16

Panel (ACR, 12/05)

25

45

17

132

17

Kesare (Pilot paper)

25

45

18

135

Financial instruments
18

Preparation question: Financial instruments

–

–

19

137

19

Complexity (12/09)

25

45

20

137

20

Ambush (ACR, 12/05, amended)

25

45

20

140

21

Grainger (6/11)

15

27

21

142

22

Aron (6/09, amended)

25

45

21

144

Share-based payment
23

Leigh (ACR, 6/07)

25

45

23

149

24

Margie (12/10)

25

45

24

152

25

Greenie (12/10)

25

45

24

154

Finding questions

v


Time

Page number

Marks

allocation
Mins

Question

Marks

Events after reporting period, provisions and
contingencies
26

Ryder (ACR, 12/05)

25

45

26

157

27

Royan (6/12)

25

45

26

160

28

Electron (Pilot paper)

25

45

27

162

Related parties
29

Egin Group (ACR, 6/06)

25

45

28

165

30

Engina (ACR, Pilot paper)

25

45

29

168

Leases
31

Preparation question: Leases

–

–

30

169

32

Holcombe (6/10, amended)

25

45

30

170

33

William (6/12)

25

45

31

173

Part C: Group financial statements
Revision of basic groups
34

Marrgrett (12/08)

25

45

33

176

35

Preparation question: Associate

–

–

34

179

Complex groups
36

Preparation question: 'D'-shaped group

–

–

35

181

37

Preparation question: Sub-subsidiary

–

–

36

183

38

Glove (ACR, 6/07, amended)

25

45

38

185

39

Case study question: Minny (12/12)

50

90

39

190

40

Case study question: Trailer (6/13)

50

90

41

195

Changes in group structures
41

Preparation question: Part disposal

–

–

43

204

42

Preparation question: Purchase of further interest

–

–

45

206

43

Ejoy (ACR, 6/06, amended)

30

54

45

208

44

Case study question: Traveler (12/11)

50

90

47

211

45

Case study question: Robby (6/12)

50

90

49

218

46

Case study question: Bravado (6/09)

50

90

51

224

47

Case study question: Grange (12/09)

50

90

53

229

48

Case study question: Ashanti (6/10, amended)

50

90

55

236

Foreign transactions and entities
49

Preparation question: Foreign operation

–

–

57

243

50

Memo (ACR, 6/04, amended)

32

58

59

245

51

Case study question: Rose (6/11)

50

90

61

248

Group statements of cash flows

vi

52

Preparation question: Consolidated statement of cash flows

–

–

63

254

53

Case study question: Jocatt (12/10)

50

90

67

256

54

Case study question: Warrburt (12/08, amended)

50

90

70

261

Finding questions


Time

Page number

Marks

allocation
Mins

Question

Answer

Part D: Performance reporting
Performance reporting
55

Alexandra (6/11)

25

45

74

266

56

Carpart (6/09, amended)

16

29

75

269

57

Ghorse (12/07)

25

45

76

271

58

Cate (6/10)

25

45

77

274

59

Calcula

25

45

78

277

Current developments
60

Preparation question: Current issues

–

–

79

281

61

Fair values and IFRS 13

25

45

80

285

62

Jones and Cousin (ACR 12/06)

25

45

81

287

Specialised entities and specialised transactions
63

Lockfine (6/11)

25

45

81

289

64

Burley (12/09, amended)

25

45

82

293

65

Seltec (6/10)

25

45

84

296

66

Ethan (6/12)

25

45

84

299

67

Norman (6/08)

25

45

85

302

68

Preparation question: Reconstruction scheme

–

–

86

304

69

Plans

15

27

87

308

70

Decany (12/11)

25

45

88

310

71

Lucky Dairy (ACR, 6/02, amended)

25

45

89

314

IFRS for small and medium-sized entities
72

IFRSs and SMEs (ACR, 6/06, amended)

25

45

90

316

73

Whitebirk (12/10, amended)

22

40

91

319

Mock exam 1
74
75
76
77

Ribby (6/08)
Coate (12/12)
Blackcutt (12/12)
Jayach (12/12)

Mock exam 2
78

79
80
81

Beth (12/07, amended)
Verge (6/13)
Janne (6/13)
Implementing IFRS (6/08)

Mock exam 3 (December 2013)
82
83
84
85

Angel (12/13)
Havanna (12/13)
Bental (12/13)
Zack (12/13)

Finding questions

vii


Topic index
Listed below are the key Paper P2 syllabus topics and the numbers of the questions in this Kit covering those
topics.
If you need to concentrate your practice and revision on certain topics or if you want to attempt all available
questions that refer to a particular subject, you will find this index useful.

viii

Syllabus topic

Question numbers

Associates
Complex groups
Consolidated statement of financial position
Consolidated statement of profit or loss and other
comprehensive income
Consolidated statement of cash flows
Corporate citizenship
Disposals
Employee benefits
Environmental issues
Ethics
Financial instruments
Foreign currency
IAS 1 (revised)
Impairment
International issues
IFRS 2
IFRS 3
IFRS 9
IFRS 10 to 12
IFRS 13
Joint ventures
Measurement of performance

Non-current assets
Provisions
Related party transactions
Reporting performance
Revenue recognition
Share-based payment
Small and medium-sized entities
Taxation

36
37 – 40
45

Finding questions

39
52 – 54
62
41 – 48
11 – 14
5
44 – 48
18 – 22
49 – 51
Throughout
57, 60
62, 77
23 – 25
34 – 54
18 – 22

34 – 54
61, throughout
65
56 – 59
7 – 10
26 – 28
29, 30
55
4, 9, 56
23 – 25
72, 73
15 – 17


Helping you with your revision
BPP Learning Media – Approved Learning Partner – content
As ACCA's Approved Learning Partner – content, BPP Learning Media gives you the opportunity to use exam team
reviewed revision materials. By incorporating the examination team's comments and suggestions regarding
syllabus coverage, the BPP Learning Media Practice and Revision Kit provides excellent, ACCA-approved support
for your revision.

Tackling revision and the exam
Using feedback obtained from the ACCA exam team review:


We look at the dos and don'ts of revising for, and taking, ACCA exams



We focus on Paper P2; we discuss revising the syllabus, what to do (and what not to do) in the exam, how

to approach different types of question and ways of obtaining easy marks

Selecting questions
We provide signposts to help you plan your revision.


A full question index



A topic index listing all the questions that cover key topics, so that you can locate the questions that provide
practice on these topics, and see the different ways in which they might be examined

Making the most of question practice
At BPP Learning Media we realise that you need more than just questions and model answers to get the most from
your question practice.


Our Top tips included for certain questions provide essential advice on tackling questions, presenting
answers and the key points that answers need to include



We show you how you can pick up Easy marks on some questions, as we know that picking up all readily
available marks often can make the difference between passing and failing



We include marking guides to show you what the examiner rewards



We include comments from the examiners to show you where students struggled or performed well in the
actual exam



We refer to the 2014 BPP Study Text (for exams up to June 2015) for detailed coverage of the topics
covered in questions



In a bank at the end of this Kit we include the official ACCA answers to the June and December 2013
papers. Used in conjunction with our answers they provide an indication of all possible points that could be
made, issues that could be covered and approaches to adopt.

Attempting mock exams
There are three mock exams that provide practice at coping with the pressures of the exam day. We strongly
recommend that you attempt them under exam conditions. Mock exams 1 and 2 reflect the question styles and
syllabus coverage of the exam; Mock exam 3 is the December 2013 paper.

Helping you with your revision

ix


Revising P2
Topics to revise
P2 has the reputation of being a difficult paper. However its pass rate is usually quite high. Although the examiner
sets challenging questions, the styles of question used are now familiar. The examiner has also provided a great

deal of feedback via examiner's reports and in the very detailed published marking schemes, many of which are
included in this Kit.
The examiner has warned very strongly against question-spotting and trying to predict the topics that will be
included in the exam. On occasions the same topic has been examined in two successive sittings. The examiner
regards few areas as off-limits for questions, and nearly all of the major areas of the syllabus can and have been
tested.
That said, exams over the years have shown that the following areas of the syllabus are very important, and your
revision therefore needs to cover them particularly well.


Group accounts. You should not omit any aspect of group accounts, as they come up every sitting. We
would advise against question spotting, but if a statement of cash flows, say, has not come up for a few
sittings, it might be a good bet. Group accounts will always be examined as part of the 50 mark case study
question, in which you may also expect a question on some aspect of ethics.



Emerging issues. The impact of a change in accounting standards on the financial statements is often
examined. Look on the IASB website for details: www.iasb.org



Share based payment usually comes up as part of a question.



Financial instruments was the subject of regular Student Accountant articles, and it is regularly tested.
Questions will be set in terms of IFRS 9 as far as it applies.



Developments in financial reporting, for example, the exposure drafts on leasing and revenue recognition.

Question practice
Question practice under timed conditions is essential, so that you can get used to the pressures of answering exam
questions in limited time and practise not only the key techniques but allocating your time between different
requirements in each question. Our list of recommended questions includes compulsory Section A and optional
Section B questions; it's particularly important to do all the Section A case-study-style questions in full as a case
study involving group accounts will always come up.

x

Revising P2


Passing the P2 exam
What to expect on the paper
Of course you cannot know in advance what questions are going to come up, but you can have a fair idea of what
kind of questions.

Question 1
This will always be a case study, with half or a little more than half on group accounts. It will often involve high
speed number crunching. Easy marks, it cannot be said too often, will always be available for basic consolidation
techniques. You cannot pass the groups part on these alone, but it can give you a foothold. Question 1 usually has
a bit of a twist, for example financial instruments or pensions. This question will also contain an element of written
explanation and a question on ethics or corporate social accounting. For example, the December 2010 paper had a
statement of cash flows; then you were asked to explain whether a change of method of preparing such a statement
was ethical.
The examiner has stressed the importance of answering the written parts of question 1. Many students ignore parts
(b) and (c), but marks can be gained for common sense.

Question 1 will always have more than half the marks allocated to the computational part. Generally, it will be in the
order of 35 marks.

Questions 2 and 3
These each cover several IFRSs and are very often – although not always – mini-case-studies, involving you in
giving advice to the directors on accounting treatment, possibly where the directors have followed the wrong
treatment. Being multi-standard, you may be able to answer parts, but not all of a question, so it makes sense to
look through the paper to select a question where you can answer most of it. If Part (a) is on an area you are not
confident about, do not dismiss the question out of hand.
The examiner is testing whether you can identify the issues. Even if you don't get the accounting treatment exactly
right, you will still gain some credit for showing that you have seen what the problem is about. So do not be afraid
to have a stab at something, even if you are not sure of the details.
These questions can be on a single standard or theme. One of these questions will be the specialised industry
question.

Question 4
This question is generally on developments in financial reporting. It may cover an aspect of reporting financial
performance – for example the Management Commentary, but it can also be set on just one standard if this
standard is undergoing revision. This question can feature criticism of existing standards, as well as aspects of new
or proposed standards.
While you certainly cannot bluff your way through Question 4, if you know your material it is a good way of earning
marks without high speed number crunching.
Question 4 may now include a computational aspect illustrating the topic you have just discussed. Usually these are
fairly straightforward.

Revising P2

xi

Remember!
The examiner stresses that it is important to learn principles rather than rote-learning techniques. He has also said
on a number of occasions that candidates should use the information in the scenario. For example, in June 2012:
'Often the content of the scenario will help students answer the question as the scenario gives candidates direction
in terms of their answers.'
The examiner has stated that students need to have a basic/good understanding of all standards and the capability
of applying them. They should always give an explanation of the IFRSs which underpin their answer.

Exam technique for P2
Do not be needlessly intimidated
There is no shortcut to passing this exam. It looks very difficult indeed, and many students wonder if they will ever
pass. But most students generally do. Why is this?

Easy marks
All the questions are demanding, but there are many easy marks to be gained. Suppose, for example, you had a
consolidated statement of cash flows with a disposal, a pension complication and a financial instruments
calculation. There will be easy marks available simply for the basic cash flow aspects, setting out the proforma,
setting up your workings, presenting your work neatly. If you recognise, as you should, that the disposal needs to
be taken into account, of course you will get marks for that, even if you make a mistake in the arithmetic. If you get
the pension bit right, so much the better, but you could pass the question comfortably while omitting this
altogether. If you're short of time, this is what you should do.

Be ruthless in ignoring the complications
Look at the question. Within reason, if there are complications – often only worth a few marks – that you know you
will not have time or knowledge to do, cross them out. It will make you feel better. Then tackle the bits you can do.
This is how people pass a seemingly impossible paper.

Be ruthless in allocating your time
At BPP, we have seen how very intelligent students do two almost perfect questions, one averagely good and one
sketchy. The first eight to ten marks are the easiest to get. Then you have to push it up to what you think is 15 (30

for the case study question), to get yourself a pass.
Do your best question either first or second, and the compulsory question either first or second. The compulsory
question, being on groups, will always have some easy marks available for consolidation techniques.

xii

Revising P2


Exam information
Format of the exam
Section A:
Section B:

1 compulsory case study
Choice of 2 from 3 questions (25 marks each)

Number of
marks
50
50
100

Section A will consist of one scenario based question worth 50 marks. It will deal with the preparation of
consolidated financial statements including group statements of cash flow and with issues in financial reporting.
Students will be required to answer two out of three questions in Section B, which will normally comprise two
questions which will be scenario or case-study based and one question which will be an essay. Section B could deal
with any aspects of the syllabus.

Additional information

The Study Guide provides more detailed guidance on the syllabus.

Analysis of past papers
December 2013
Section A
1

Consolidated statement of cash flows with acquisition of subsidiary and adjustments for deferred tax, a
government grant and a pension plan; classification of cash flows; ethics

Section B
2
3
4

Revenue recognition; impairment loss; sale and leaseback
Specialised industry question set in a bank, covering debt versus equity, hedging and the application of IFRS
10 in determining which party is the acquirer
IAS 8: use of judgement in selecting accounting policies; prior period errors (three scenarios)

The December 2013 Paper is Mock Exam 3 in this Kit.

June 2013
Section A
1

Consolidated statement of financial position with a 'D’-shaped group; comparison
of methods for valuing non-controlling interest; ethics

Question in this Kit

40

Section B
2
3
4

Segment reporting, revenue recognition, provisions and property-related matters
In-depth analysis of whether a lease was a finance lease, a discontinued operation
and fair value of an investment property
Importance of and barriers to disclosures in annual reports and application to a
scenario

79
80
3

Revising P2

xiii


Examiner's comments
The examiner stressed again the importance of answering all questions and all parts of questions, and also of exam
technique: exam technique consists of a few simple procedures that can help the candidate immeasurably.
Answers should have a structure and cover points in an organised way. It may be best to write less on each point,
leave out some of the background knowledge but focus on the facts/scenario in the question. The examiner does
not need to know, for example, the role of the IASB in standard setting unless specifically asked in the question but
often candidates may outline this as an introduction to an answer.
There is always a model solution to the question but in practice there are always opposing viewpoints, and

candidates should not be afraid of expressing these viewpoints as they will not be penalised if the rationale is
acceptable. The questions are not written to trick candidates but it is important to read the question carefully.
Always ask yourself, is what I am including relevant to the question? Successful candidates demonstrate relevant
knowledge by using ideas and concepts from recommended accounting practice. Practical examples from reading
current articles are important ways of supporting the points made. Many candidates simply set out everything they
know, hoping that some of the material is relevant. There is a need for a broader understanding rather than rotelearnt facts.
Candidates should try and use proper sentences and paragraphs rather than bullet points, as this will contribute to
the awarding of professional marks. Candidates should never use abbreviations of words such as text language.

December 2012
Section A
1

Consolidated statement of financial position with sub-subsidiary, associate and
disposal group; discussion on IFRS 5; ethical considerations of accounting treatment

Question in this Kit
39

Section B
2
3
4

Government grant; foreign exchange and cash flows; IFRS 10 and control; taxation
and prior period adjustment
Investment property; leasing (substance of transaction); provision; impairment
IFRS 13 Fair value measurement: principles, three-level hierarchy; IFRS 13 fair
valuing of asset and liability with computations

75
76
77

Examiner's comments

Candidates performed quite well in this session. As usual the paper dealt with a wide range of issues and
accounting standards. There are several key principles in each standard, which are the basis of most of the
examination questions, and candidates should concentrate on understanding and interpreting these principles.
Candidates need to understand the standards, and not just learn their content. Understanding will lead to better
application in the examination.
Candidates should practice divergent thinking, which is the ability to think of several possible answers to a question
before providing the solution. This is the ability to see potentially different outcomes for a given set of
circumstances. This will lead to candidates having the ability to apply the standards to different scenarios. Every
examination session produces scenarios, which candidates will not necessarily have met before, and thus there is a
need for this type of reasoning.
Candidates often simply recite the standard leaving the marker with the task of determining how applicable the
answer actually is to the question. Candidates should adopt a model of learning which suits them and by doing this;
candidates will be better prepared for the examination.

xiv

Revising P2


June 2012
Section A
1

Consolidated statement of financial position with business combination achieved in

stages and joint operation; de-recognition of financial asset ; ethics

Question in this Kit
45

Section B
2
3
4

Sale and leaseback, defined benefit pension plan, cash-settled share-based payment
and contingent liability in the context of a business combination
Measuring fair value, impairment of goodwill, deferred tax liabilities and the fair
value option for an accounting mismatch; shares as financial liability or equity
Changing rules on provisions (discussion and calculation)

33
66
27

Examiner's comments

Generally candidates performed well on this paper, with Questions 1 and 2 being answered better than Questions 3
and 4.
Candidates approached the examination well and did not appear too time-pressured, but some failed to produce
answers of sufficient length and appear to be spending too much time on question 1. Question 1( a) is designed to
test candidates' computational skills and very brief explanations may be useful to the marker but many candidates
entered into detailed discussion of the relevant standard, which costs time in the examination, and it is important
for candidates to use their time effectively. Very few marks are allocated in question 1(a) for detailed discussion.
Candidates often wasted time discussing a standard in detail when an application of the standard was required.

Candidates should read the question and formulate an answer in their mind. The answer should be based upon the
detail of the question. Simply reading the requirement without application to the scenario does not gain marks.
This examination focussed on application of knowledge and it was application, which often let candidates down.
Candidates often do not use the information in the scenario in order to develop their answers. Often the content of
the scenario will help students answer the question as the scenario gives candidates direction in terms of their
answers. This was particularly true of Question 4.

December 2011
Section A
1

Consolidated statement of financial position with business combination achieved in
stages; segment reporting; ethics

Question in this Kit
44

Section B
2
3
4

Internal reconstruction
Specialised industry question: intangible assets and impairment testing rules
Revenue recognition: current problems and proposed changes

70
10
4

Revising P2

xv


Examiner's comments
The standard of answers varied. Many candidates passed the examination because of strong performance on
question 1 and the questions answered best by candidates were Question 1a, Questions 3(a/c), and Question
4(a)(i).
Answers to Section B questions are often very general in nature with no relationship to the facts given in the
scenario. This can involve just repeating information given in the question without explaining how it impacts on the
financial statements or just quoting facts from standards without reference to the question. This can result in long
answers that often don't address the issues in a scenario and may leave candidates bemused as to why they have
failed when they have written so much. Often these scripts bordered on illegibility, which makes marking difficult. It
is often better to explain a few points well than trying to regurgitate all the knowledge that the candidate possesses.
There were however many excellent scripts, particularly in answering the technical aspects of group accounting and
the issues surrounding intangible assets.
Too many candidates let themselves down by failing to attempt all parts of the questions chosen, or in some cases
by answering all four questions.

June 2011
Section A
1

Groups with a foreign subsidiary, other adjustments and the remainder on ethical
issues

Question in this Kit
51

Section B
2
3
4

Specialised industry question with IFRS 1, IFRS 3 intangible assets and
restructuring plans and provisions
Specialised industry question with reclassification of long-term debt, correction of
an error
Change to IFRS 9 rules for financial assets; change to expected loss model for
impairment of financial assets

64
55
21

Examiner's comments
The examination consisted of four questions (Question 1 for 50 marks and three further questions of 25 marks each
of which candidates had to choose two to answer) The performance of candidates was quite pleasing with good
marks being achieved in all aspects of the paper. The approach to the examination is good with little evidence of
time pressure although some candidates are still failing to produce answers of sufficient length and appear to be
spending too much time on a single question. Candidates do not use the information in the scenario in order to
develop their answers.
Question 1 is designed to test candidates' computational skills and brief explanations are often useful to the marker
but detailed discussion of the relevant standard is not normally required. Candidates often wasted time discussing a
standard in detail when an application of the standard was required. It is important also to make sure that the
answer is relevant to the question. In this exam there was evidence of students discussing standards at length that
were not relevant to the question.

xvi

Revising P2


December 2010
Section A
1

Consolidated statement of cash flows

Question in this Kit
53

Section B
2
3
4

Share-based payment; derivatives
Provisions, contingent liability, significant influence; share-based payment
Small and medium-sized entities

23
24
73

Examiner's comments
This was a demanding paper dealing with a range of issues and accounting standards, but candidates responded
well resulting in a good pass rate. However, when issues get more complex, they perform less well. Topical issues
of a discursive nature are quite well done, indicating a good awareness of current issues. However, the

computational parts are often poorly completed which again seems to indicate that application of knowledge is a
problem. Additionally, some candidates do not write in sufficient detail on the discursive parts of the paper, and do
not answer the question set. A significant part of the paper comprises discursive elements and candidates need to
develop skills in this area.
Where possible, candidates should make sure that they show all workings and start each question on a new
page. Time management issues seem to have been less prevalent in recent diets, but where the time allocated to
a question is over, candidates should move on and start a new question, leaving sufficient space to come back
and finish the question if time allows. Candidates seem to have difficulty applying standards to the scenarios
given in the questions, even though they have the knowledge, and the scenario can often give help in answering
the question. There are several key principles in each standard. Sometimes these are lost in the detail of the
standard. These principles are the basis of most of the examination questions and candidates should concentrate
on these principles.

June 2010
Section A
1

SPLOC1 with two disposals and adjustments relating to other topics

Question in this Kit
48

Section B
2
3
4

Deferred tax; impairments; deemed disposal/discontinuation; retirement benefits
Specialised industry: derivatives and hedging; brands; purchase of retail outlets
through companies

Flaws in accounting for leasing; numerical adjustments on sale and leaseback

58
65
32

Examiner's comments
The pass rate for this paper was satisfactory, and the examiner was generally pleased with the way candidates
responded to a testing paper covering a wide range of accounting issues and standards. Examination techniques
were well applied. However yet again there was evidence of candidates only answering two questions rather than
the three questions required, and also leaving out the ethics part of question 1, suggesting that they do not
appreciate the importance of attempting all of the examination paper, or perhaps particular problems with ethical
instruments. Some candidates still do not have a good understanding of accounting for financial instruments which
are examined frequently in this paper. It is essential that candidates get to grips with this topic.

Revising P2

xvii


December 2009
Section A
1

Consolidated statement of financial position with changes in group structure

Question in this Kit
47

Section B

2
3
4

Impairment: discussion and calculation
Revenue recognition; recognition of assets; joint control
Complexity in financial instruments

9
64
19

Examiner's comments The paper dealt with a wide range of issues and accounting standards. The examiner said
that the paper was quite testing but that candidates responded well resulting in a pleasing pass rate. Candidates
had benefited from reading articles in Student Accountant on specific topics and had built on their knowledge,
particularly of the revised IFRS 3 and financial instruments. Candidates also seem to have applied good examination
techniques in answering the paper. In particular, candidates were not making the mistake of missing out questions
or parts of questions.

June 2009
Section A
1

Business combination achieved in stages; ethics

Question in this Kit
46

Section B
2

3
4

Financial instruments: fair value, convertible bonds, derecognition, foreign subsidiary’s
debt, interest on employee loan
Revenue recognition, assets
Employee benefits: problems of current treatments

22
56
14

Examiner's comments. This was the first sitting where the technical aspects of IFRS 3 (Revised) 'Business
Combinations' were examined in question 1. It seemed as though many candidates were not adequately prepared
for the question even though several articles had appeared in the student accountant. The results overall were
disappointing. The main reasons for this appeared to be lack of a thorough understanding of IFRS 3 (Revised), poor
time management and difficulty in applying knowledge to questions. An important aspect of the paper is the current
issues question. Generally speaking current issues would comprise those issues being discussed in the
accountancy press or those issues being dealt with by the IASB in its current work programme or very recent
accounting standards. Candidates do not perform well on current issues questions and in order to improve their
performance in this area, they should make sure that they manage their own learning by reading wider than just
course notes and manuals. The IASB work programme for example is open for everyone to view and web sites such
as www.iasplus.com are available for candidates to read around subjects that are on the programme.

December 2008
Section A
1

Group statement of cash flows with adjustments and interpretation; ethics

Question in this Kit
54

Section B
2
3
4

xviii

Changes to accounting for business combinations
Tangibles, intangibles and revenue recognition
Accounting standards and disclosure

Revising P2

34
9
2


Examiner's comments. The paper was generally well answered and the pass rate was pleasing. However
candidates must learn to apply their knowledge and not simply reiterate definitions.
The approach to the examination seems to be improving with little evidence of time pressure although some
candidates are still failing to produce answers to all parts of the paper and appear to be spending too much time on
question 1. Also candidates are often not using the information in the question to develop their answers even when
the question requires the information to be used. There is a minimum amount of information required in each
question in order to gain a pass standard and candidates do sometimes not appreciate this.

Revising P2

xix


Exam update
Examinable documents
The following documents are examinable for sittings up to June 2015.
Knowledge of new examinable regulations issued by 31st August will be required in examination sessions being
held in the following exam year. Documents may be examinable even if the effective date is in the future.
The documents listed as being examinable are the latest that were issued prior to 31st August 2013 and will be
examinable in examination sessions up to June 2015.
The study guide offers more detailed guidance on the depth and level at which the examinable documents will be
examined. The study guide should be read in conjunction with the examinable documents list.

IAS 1
IAS 2
IAS 7
IAS 8
IAS 10
IAS 12
IAS 16
IAS 17
IAS 18
IAS 19
IAS 20
IAS 21
IAS 23
IAS 24
IAS 27
IAS 28

IAS 32
IAS 33
IAS 34
IAS 36
IAS 37
IAS 38
IAS 39
IAS 40
IAS 41
IFRS 1
IFRS 2
IFRS 3
IFRS 5
IFRS 7
IFRS 8
IFRS 9
IFRS 10
IFRS 11
IFRS 12
IFRS 13
IFRS

xx

Revising P2

Title
International Accounting Standards (IASs)/International Financial Reporting Standards (IFRSs)
Presentation of financial statements
Inventories

Statement of cash flows
Accounting policies, changes in accounting estimates and errors
Events after the reporting period
Income taxes
Property, plant and equipment
Leases
Revenue
Employee benefits
Accounting for government grants and disclosure of government assistance
The effects of changes in foreign exchange rates
Borrowing costs
Related party disclosures
Separate financial statements
Investments in associates and joint ventures
Financial Instruments: presentation
Earnings per share
Interim financial reporting
Impairment of assets
Provisions, contingent liabilities and contingent assets
Intangible assets
Financial Instruments: recognition and measurement
Investment property
Agriculture
First-time adoption of international financial reporting standards
Share-based payment
Business combinations (revised Jan 2008)
Non-current assets held for sale and discontinued operations
Financial instruments: disclosures
Operating segments
Financial instruments

Consolidated financial statements
Joint arrangements
Disclosure of interests in other entities
Fair value measurement
For Small and Medium-sized Entities


ED
ED
ED
ED
Draft IFRS
ED
ED
ED
ED
DP

Other Statements
Conceptual Framework for Financial reporting
Management Commentary
Consultation Draft of the International <IR> Framework
EDs, Discussion Papers and Other Documents
Financial Instruments: Expected credit losses
Revenue from contracts with customers
Leases
Sale or contribution of assets between an investor and its associate or joint venture
IFRS 9 Chapter 6 Hedge accounting
Equity Method: share of other net asset changes
Improvements to IFRS

Acquisition of an interest in a joint operation
Investment entities
A review of the Conceptual Framework for Financial Reporting

Note. The accounting of financial assets and financial liabilities is accounted for in accordance with IFRS 9 to the
extent that this standard was in issue as at 31 August 2013. For any elements of the study guide deemed as
examinable and not covered by IFRS 9, these elements should be dealt with by studying IAS 39.

Important note for UK students
If you are sitting the UK P2 paper you will be studying under International standards and up to 20 marks will be for
comparisons between International and UK GAAP. The ACCA UK Syllabus and Study Guide gives the following
advice:
International Financial Reporting Standards (IFRS) are the main accounting standards examined in the
preparation of financial information. The key differences between UK GAAP and International Financial
Reporting Standards are looked at on a subject by subject basis. The comparison between IFRS and UK
GAAP will be based on the new UK GAAP as set out in FRSs 100–102, so the standard by standard
comparisons that appeared in previous editions of this study guide are now combined in outcome C11 d):
Discuss the key differences between the IFRS for SMEs and UK GAAP.
This Kit is based on International Financial Reporting Standards. An online supplement will be available at
www.bpp.com/learning-media, covering the additional UK issues and providing additional question practice.

Revising P2

xxi


Useful websites
The websites below provide additional sources of information of relevance to your studies for Corporate Reporting.


www.accaglobal.com
ACCA's website. The students' section of the website is invaluable for detailed information about the
qualification, past issues of Student Accountant (including technical articles) and a free downloadable
Student Planner App.



www.bpp.com
Our website provides information about BPP products and services, with a link to ACCA's website.



www.ft.com
This website provides information about current international business. You can search for information and
articles on specific industry groups as well as individual companies.



www.economist.com
Here you can search for business information on a week-by-week basis, search articles by business subject
and use the resources of the Economist Intelligence Unit to research sectors, companies or countries.




This site carries business news and articles on markets from Investment Week and International Investment.



www.pwc.com

The PricewaterhouseCoopers website includes UK Economic Outlook.



www.cfo.com
Good website for financial officers.



www.bankofengland.co.uk
This website is useful for sourcing Bank of England publications.

xxii



www.iasb.org



www.accountancyfoundation.com



www.ifac.org



www.IASPlus.com

Revising P2


Questions

1


2