StrategicBusiness Reporting

Marking Insight

Vicky XU

SBR China Tutor Guru

8th June 2020

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Webinar agenda

1. How marking works at ACCA – marking team

2. General principles of SBR marking

3. Overview of the marking of the progress test

4. Important learning support

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1. How marking works at ACCA – marking team

Qualifications Technical

Adviser

Marking

Session Lead

Team Leader

Markers

Team Leader

Markers

Team Leader

Markers

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2. General principles of SBR marking (1/2)

• The examiner’s published model answers are extremely detailed, and are

intended as a reference tool.

• Credit is given for any valid, relevant and specific answers

• Own figure rule (OFR)

• No negative marking

• No marks lost for poor spelling or grammar

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2. General principles of SBR marking (2/2)

• Generally 1 or 2 marks per relevant point

• Marking will reflect the intellectual level demanded by the task

requirements

• Technical knowledge in context of the given scenario – not theory

• Candidates are expected to apply concepts and principles to

complex real-life events which invariably extend beyond a single

principle

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3. Overview of the marking of the progress test

Section A – 2020/3 Q1

Part (a) required candidates to draft an explanatory note to the directors which

included an explanation of how the functional currency of a subsidiary

company is determined, given information on head office location, autonomy,

finance sources and key transactions.

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3. Overview of the marking of the progress test

Section A - 2020/3 Q1

Part (bi) asked for the accounting treatment in consolidated financial statements

of contractual arrangements with customers, prohibiting the customers from

using competitors.

Part (bii) required a calculation of goodwill at acquisition date (in local

currency, and after translation into dollars), and after impairment and translation

at the reporting date.

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3. Overview of the marking of the progress test

Section A - 2020/3 Q1

Part (c) required an explanation on the accounting treatment of a 100% equity

interest meeting the requirements for reporting as held for sale under IFRS 5, but

with the sale being delayed beyond the 12 month limit due to unforeseen

circumstances beyond the control of management.

Part (d) required a calculation and discussion of the impairment of bonds

over two years, with deteriorating credit risks between the years. This part had the

most marks allocated to it (11 marks) but was often the shortest answer compared

to the other parts in Q1.

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3. Overview of the marking of the progress test

Section A - 2020/3 Q2

Question 2 required a discussion of a proposed restructuring provision, a

description of good stewardship in the context of the restructuring proposals,

whether there was a need for related party disclosures, and a further

discussion of the ethical implications of events and circumstances arising within

the corporate environment.

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3. Overview of the marking of the progress test

Section B - 2020/3 Q34

Question 3 was set around a football club facing industry-specific issues relating

to its stadium, television programme rights and players’ contracts. The question

had two parts. Part (a) related to the accounting treatment of its stadium, split

into three requirements. Part (b) focused on the intangible assets.

Question 4 focused on sustainability and environmental, social (ESG) and

governance issues, dividing this area between the importance of sustainable

information (part (a)), and the accounting treatment of management responses to

ESG issues (part (b)).

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3. Overview of the marking of the progress test

3.1 Format

3.2 Answer the requirement

3.3 Correcting entry

3.4 Applying your knowledge of accounting standards

3.5 Study the whole syllabus

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3.1 Format – Q1

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3.2 Answer the requirement

• 3.2.1 Please read the requirement carefully

• 3.2.2 Do not omit anything

• 3.2.3 Do no write assumed knowledge

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3.2.1 Answer the requirement – Q2 a iii

Tips:

If the requirement is to explain the accounting treatment in a given scenario,

answers are best structured such that the standard or treatment is first

explained (an expression of the candidate’s knowledge), and then arrive at

a recommended treatment (application of the standard to the scenario).

Weaker answers may skip the ‘knowledge’ aspects, and jump to a conclusion,

or even demand compliance with a standard without any discussion of the

scenario.

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3.2.1 Answer the requirement – Q2 a iii – Good example

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3.2.1 Answer the requirement – Q2 a iii – Poor answer

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3.2.1 Answer the requirement

More examples

Specimen1 Q1

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3.2.2 Answer the requirement – Q1 b ii

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3.2.2 Answer the requirement – Q1 b ii – Good or Poor?

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3.2.2 Answer the requirement – Q1 b ii – Good or Poor?

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3.2.2 Answer the requirement – Q1 b ii

Tips:

Do not omit anything, especially those easy marks

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3.2.3 Answer the requirement – Q1 b i

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3.2.3 Answer the requirement – Q1 b i – Good example

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3.2.3 Answer the requirement – Q1 b i – Poor answer

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3.3 Correcting entry

• 3.3.1 Calculation

• 3.3.2 Necessary journal entry (yes please!)

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3.3.1 Correcting entry – Q1 d

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3.3.1 Correcting entry – Q1 d – Good example

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3.3.1 Correcting entry – Q1 d – Poor answer

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3.3.1 Correcting entry – Q1 d – Poor answer

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3.3.2 Correcting entry – Q3 a ii

In the year to 31 October 20X6, it is anticipated that $2 million will be spent to

improve the crowd barriers in the stadium. There is no legal requirement to

improve the crowd barriers. Leria Co has incorrectly treated this amount as a

reduction of the asset’s carrying amount at 31 October 20X5 and the

corresponding debit has been made to profit or loss. At 31 October 20X5, the

carrying amount of the stadium, after depreciation and deduction of the crowd

barrier improvements, is $18 million.

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3.3.2 Correcting entry – Q3 a ii – Good example

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3.3.2 Correcting entry – Q3 a ii – Good example

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3.3.2 Correcting entry – Q3 a ii – Poor answer

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3.3.2 Correcting entry – Illustration

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3.4 Applying your knowledge of accounting standards

• Accounting standards only is clearly insufficient. However, defining

technical terms is still necessary – don’t expect to pass on it

• Justification is more important than the opinion

• Use supporting evidence – from the scenario!

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3.4 Applying – Q1 c – Good example

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3.4 Applying – Q1 c – Good example

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3.4 Applying – Q1 c – Poor answer

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3.4 Applying – Q3 a i – Good example

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3.4 Applying – Q3 a i – Poor answer

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3.4 Applying

Question:

What is “Discuss/ Explain/ Analyse/ Evaluate” in SBR?

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More examples

Specimen2 Q4 b

3.4 Applying

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3.4 Applying

Story telling +

Who is interested - stakeholder impact

- Any management bias, e.g. bonus or share-based payment scheme?

- Any loan covenant, e.g. gearing, interest cover?

- Investor perspective, e.g. EPS?

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3.4 Applying More examples

2012/12 Q2 c

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3.5 Study the whole syllabus

• Rebuttable presumption under IAS 38 that basing amortisation on revenue, for

which the intangible is used, is inappropriate, unless both use and revenue are

highly correlated.

• Sustainable Development Goals (SDGs) explaining how companies can create

economic, social and environmental value for their investors and stakeholders

• Alternative performance measures

• Conceptual framework

• Current issues, etc.

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3.5 Study the whole syllabus – Q2 a ii – Good example

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3.5 Study the whole syllabus – Q2 a ii – Poor answer

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Tips:

Volume and format of writing

• Driven by the number of marks available or allocated

• 1 good, well developed point = 1 mark

• Identify each distinct point

• Use headings

Style of writing

• Avoid long, complex, hard to read sentences

• Short, succinct points

• Avoid rambling and repetition

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Tips:

• Presentation

• Logical flow of the answer

• Clarity of the justification and explanations provided

• It is the application of the information that will gain the marks as well as the

implications for the investor or entity. Rote learned information will not gain the

marks. The marker has to judge whether the answer could be presented to

a client (question mark?) and whether there is real understanding of the

issues.

• Practice exam question TO TIME is essential!

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4. IMPORTANT Learning support

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4. IMPORTANT Learning support

Exam technique –

Read the mind of an SBR marker -1

Read the mind of an SBR marker -2

Recommended approach to Section B

of the SBR exam

…

Technical knowledge –

Syllabus and study guide

Intellectual Levels

Conceptual Framework

Specimen; Past exam

Technical articles

…

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Thank you!