OpenTuition ACCA Exam Tips for June 2016 ACCA Papers
ACCA Exam Tips should not be relied on, they are only intelligent guesses.
The only purpose of the ACCA Exam Tips is to give you suggestions for topics to concentrate on in your last few days of preparation. Do not exclude other topics from your overall preparation.
Tips for ACCA F1 – F3
No exam tips available – Multiple choice questions cover entire syllabus
ACCA Exam tips for Paper F4 English
Q1 Rules of interpretation, literal and golden
Q2 Privity of contract and intention to create legal relations
Q3 Terms, representation, implied and express
Q4 Appointment, powers and duties of a plc company secretary
Q5 Legality of dividends and consequences OR treasury shares
Q6 Duty of directors to promote the success of the company
Q7 Duties of principals and agents
Q8 Advert scenario, invitation, offer, counter offer, breach
Q9 Partnership dissolution
Q10 Fraudulent and wrongful trading OR Bribery Act
ACCA Exam tips for Paper F4 Global
Q1 Role of ICC and WTO
Q2 Meetings and resolutions
Q3 Arbitration, the need for the agreement to be in writing
Q4 Sale of Goods, anticipatory breach and remedies
Q5 Company statutory registers OR treasury shares
Q6 Grounds for the Court to issue a compulsory winding-up order
Q8 Contract and breach
Q9 Partnership dissolutions
Q10 Fraudulent and wrongful trading OR Bribery Act
– Corporate governance, neds vs execs
– Lifting the veil
ACCA Exam tips for Paper F5
Linear programming (or Decision making under uncertainty, with a small decision tree)
Mix & Yield Variances
Performance measurement – financial, non-financial, and divisionalised
Budgeting / Learning curves
ACCA Exam tips for Paper F6
Each new round of annual exams will always include topics that the F6 examining team have written about in their published technical articles, most notably in the Finance Act (FA) Update article (FA 2012) and in any new technical articles. For 2013 we have so far two such articles entitled Motor Cars and Benefits respectively.
Although any and all of what appears in the FA Update may feature in this
year’s exams particular attention should be paid to new legislation and major
changes to existing legislation.
In this respect note specifically:
(1) Overseas branches and the new exemption election, noting very carefully the worked example on evaluating whether or not the election would have been worthwhile for a company to have made.
(2) The recent reductions in the main rates of Corporation Tax (CT) mean that either a marginal or large company whose Chargeable Accounting Period spans two Financial Years will require a split calculation of their CT Liability. Again work the examples given. Note if this were tested within Question 2 then as Capital Allowances (CA) are not examinable for such a company straddling FY 2011 and FY 2012 then a detailed CA computation would need to be performed for an unincorporated trader presumably in Question 1.
(3) The changes in car benefits may be tested in a standard Employment Income assessment and also contain other benefits as per the Benefits article. Given the separate detailed article on Motor Cars this may instead form the basis of the more challenging style of question now favoured by the examining team where the candidate is required to think very carefully to answer a more unusual stated requirement.
This may involve for example evaluating the tax position of both the business
(unincorporated or incorporated), and if separate, the individual, regarding the
provision of a car and fuel to an employee or proprietor. This may involve
elements of Income Tax, Corporation Tax and NIC’s. Once more work carefully
through the exam standard example at the end of the article.
Income Tax – Question 1 probably 30 marks, and possibly part of Questions 4 or 5
– Preparation of Income Tax Computation(s) possibly for spouses / civil partners with exempt income, joint income and separate sources of employment income and trading profits
– Employment Income to include use of own car or company car
– Trading profit to require a detailed CA computation (if not tested in Q.2)
– NIC’s payable by each spouse
Corporation Tax – Question 2 probably 25 marks, and possibly included in Questions 4 or 5
– Preparation of CT Computation for CAP
straddling FY’s 2011 and 2012
– Adjustment of profits
– Operating overseas through a subsidiary or a branch and evaluation of whether exemption election for overseas branches worthwhile
– Use of losses including group relief and implications of gains group membership
– Transition from normal due date to Quarterly Instalment Payments
Questions 1 & 2 will always require the candidate to prepare Income Tax Computation(s) and Corporation Tax Computation(s). You must learn these formats, bases of assessment and know the main exempt income sources. You will also be required to prepare an adjustment of profit statement and prepare a Capital Allowances Computation – again these formats and rules must be learned!!
Chargeable Gains – Question 3 for 15 marks and possible involvement in any other question
– Calculation of CGT liability for
individual involving 18% and 28% tax rates along with gains qualifying for
entrepreneurs’ relief 10% tax rate
– Availability and use of entrepreneurs’
relief and gift relief
VAT – 10 marks in Question 1 or 2, or up to whole of Question 4 or 5
– VAT return with output tax issues on discounts and impaired debts and recoverability of input tax including entertaining expenses and purchases of plant and machinery and cars
– Group VAT registration and advantages and disadvantages of companies joining
– Compulsory registration
IHT – Question 5 for between 5 and 15 marks
– Compute transfer of value
– Compute IHT on lifetime transfers arising on death with possible involvement of CLT made more than 7 years before death followed by computation of IHT on Death Estate
Other Sundry Topics
– Income Tax losses
– Assessments of partners with a change in partners
– Self Assessment
Candidates should also ensure that they have worked through all the technical articles from the examining team available on the ACCA website.
Students should never rely on F6 exam tips from any source as exam success is based on a sound knowledge of the basic rules that underpin the computations required for each tax and the ability to apply this knowledge within the 3 hours and 15 minutes available.
This is based on considerable practice of past examination questions which have been updated for Finance Act 2012 and by sitting a mock examination in the allotted time. It can be of little surprise that students fail exams if the last time they sat such an exam was when they failed at the previous sitting!
If any of the areas tipped should appear then this, if you are prepared, should be a bonus – you should not be expecting these areas and then be disappointed when they do not appear and therefore be immediately at a psychological low in the exam room!
ACCA Exam tips for Paper F7
Consolidated Statement of Financial Position with subsidiary and associate
“The usual” – prepare Statement of Financial Position, Statement of Income
and possibly Statement of Changes in Equity
Within the question, mini problems including2 different depreciation rates, deferred tax calculation, impaired asset, loan interest ( or preference dividend ) accrual, adjustment to revenue and development expenditure
Cash flow ( 12 marks ) and interpretation ( 13 marks )
Small exercise on leasing or borrowing costs and explanation of part of Framework
One of earnings per share or a PPE problem with costs of improvements and or treatment of impairments
ACCA Exam tips for Paper F8
Internal control – sales; letter of weakness
Assertions and evidence to support the assertions
Events after the period end (adjusting/non-adjusting)
Audit planning; accepting new business
ACCA Exam tips for Paper F9
Capital rationing calculation + discussions on lease / buy and replacement
WACC calculation + CAPM + discussion on theories of gearing
Receivables management + funding of working capital + foreign exchange risk management
Business valuation + discussion on dividend policy
ACCA Exam tips for Paper P1
Dominant director who fails to comply with corporate governance ( in many
ways ). Advise what changes are necessary to bring company into compliance. Role
of an internal auditor and importance of internal controls. How may the
appointment of non-executives help the company – what role could they play?
Identification of business risks facing a company and how they could be managed
Importance of “The management commentary” and what matters could be included.
Construct an argument why such a commentary should be mandatory.
Apply Kohlberg ( or Gray, Owen and Adams ) to a situation
Possible – the role of one of the board sub-committees – any one of
remuneration, nomination, risk, audit or ethics
Be prepared to need to use a calculator in the exam
ACCA Exam tips for Paper P2
Either cash flow or foreign consolidation ( I’m preferring cash flow! ), some
corporate governance element and / or some ethics
A “Various IAS / IFRS” question – 4 or 5 tricky areas where the directors are
proposing to follow their preferred treatment, but they are probably wrong.
Need to explain how / why they are wrong
Similar to question 2 with IFRS and IAS covering such as Share based payments, Employee benefits, Leasing ( recent article in Student Accountant ), Revenue
Management commentary, publication of KPIs, mandatory or voluntary, potential
problems with the concept of “effective control” where an investor holds, say,
35% and auditor maintains that this is effective control but directors refute it
ACCA Exam tips for Paper P3
General business analysis: activity based costing; linear regression; generic strategies
Business process change: Harmon, swim lane diagram
e-Marketing – particular emphasis on pricing, including calculations
People – job design and motivation
ACCA Exam tips for Paper P4
Section A – 50 mark compulsory question
NPV calculation for an investment in a foreign country, including forecasting exchange rates, calculation of cost of capital, inflation and tax. Discussions on risks and on ethical issues.
Section B – choice of 2 from 3, 25 mark questions
1 Black Scholes option pricing
2 Interest rate risk management
3 Written question on Islamic finance
ACCA Exam tips for Paper P5
Activity based costing and management, and learning curves.
Quality; non financial KPIs
Balanced score card
Expected values; BCG
Transfer pricing and general financial performance analysis
ACCA Exam tips for Paper P6
Questions 1 and 2 on the paper will be based around real life practical scenarios.
Question 1 will be for 35 marks and contain 4 professional marks awarded for structuring the answer in the proper format and dealing professionally with the issues raised. In either of these first 2 questions (question 2 will carry 25 marks), we are also likely to find 5 marks dealing with ethical issues such as confidentiality or non disclosure.
Here are 9 marks therefore that are little to do with technical competence in taxation in which candidates at this level should and must score highly!
A favourite area of the examining team deals with groups of companies, often where losses, both trading and capital have been experienced along with other chargeable gains arising and these need to be managed efficiently.
A number of areas where the candidate is asked to advise on both actual and planned transactions would also be involved. A major issue here is dealing with changes in group structures such as a proposed acquisition of a target business where either the client company may purchase the shares in the target company or the assets and trade of the target company. Major issues here for a buyer are access to the pre acquisition trading and capital losses of the target company through a share purchase as well as the tax write offs available on the purchase of intangibles within an asset and trade purchase. This may also test Stamp Duty and Stamp Duty Land Tax issues for buyers as well as VAT issues especially the capital goods scheme
The question may also have an international aspect to it with advice being required on whether to set up an overseas business as a subsidiary or branch, the application of the CFC legislation and whether to make the exemption election in respect of overseas branches.
Important points in the owner managed business life cycle lend themselves well to practical real life scenarios involving multiple taxes. Incorporation may test Income Tax, CGT, Corporation Tax, VAT and Stamp Duty as the assets and trade of the individual are transferred to a company.
A tax efficient exit strategy for the owner manager is also where the client would need well structured professional advice. Should the client sell his shares in his company possibly accepting shares and loan stock from the buyer as well as cash, or should the company sell its assets and trade and then distribute the net cash to the owner as either a capital or income distribution.
If the taxpayer is a minority shareholder then only a share disposal is possible and a purchase of own shares by the company might be an attractive exit strategy.
Another favoured area of the examining team has been the overseas aspects of personal tax where we may have to advise on the implications for all the personal taxes of say a non UK domicile coming to the UK on a contract of employment or renewing a contract which may then involve a subsequent remittance basis charge or now even an increased charge.
Other scenarios would include a UK resident accepting a contract of employment overseas and determining whether their overseas income would be chargeable to UK tax and if so the application of DTR and/or someone returning from an overseas contract and seeking advice on when to dispose of various assets.
With some candidates now coming through to P6 having passed F6 with IHT in that syllabus we may see a move away from standard computational exercises on the death of the taxpayer. Advice may be needed on when planned gifts should be made, in lifetime or on death and therefore in relation to lifetime gifts the taxpayer’s CGT position will need to be considered. This brings into play the CGT and IHT reliefs which are consistently examined as students consistently get them wrong! Candidates must know the conditions for reliefs to apply and must not confuse CGT and IHT reliefs – note particularly gift relief and entrepreneurs’ relief in CGT and BPR in IHT.
If a death estate is required it is likely that there would be significant bequests to charity bringing in the new reduced rate. Planning after death would then involve the use of a deed of variation.
In terms of advising on tax efficient investments then, though high risk, the savings under the EIS or new Seed EIS are high and may be tested.
ACCA Exam tips for Paper P7
Respond to an email ( with briefing notes from a meeting with a (possibly )
new client ). You are asked to prepare an outline report for the partner to
present the case / problems to the members of the audit team at the planning
meeting. Take your calculator – there WILL BE materiality considerations to
take into account
Identify business risks ( or audit risks ) relating to a client and suggest ways to minimise the risk
“Identify the matters you should consider” and “State what audit evidence you
should expect to find” BEWARE the difference between “audit evidence you should
expect to find” compared with “the audit procedures which you should expect to
have been carried out”
Various matters and their impact on the audit report / opinion
Advantages and costs of establishing an internal audit department as distinct from outsourcing OR Comment on the ethical and professional issues raised within a brief scenario with 2 or 3 matters identified