Thursday, June 30, 2011
See you in July 2011!
Hope to see you guys again starting July 2011, please register as early as possible to avoid penalty. You should first go to ACCA department to get the registration form and then go to level 2 of main campus to generate invoice and pay. All of these should be done by 8th of July, after that RM300 would be charged for penalty. Take care and enjoy the last few moment of holidays! :)
Tuesday, June 28, 2011
Answering theory questions
What to write? How much to write? How to earn full marks? Theory questions are seen by many as one of the problems to pass the exam. The further you go, the more important are the theories.
The keys to getting good marks in theory are:
1. Focus on answering the question - the verbs are important to note.
2. Use simple and clear English.
3. Good presentation - Use headings to ease marking.
4. Take into account the reader.
For point 4, you should ask yourself, is your answer useful for the reader? For example, if you are asked to advise the financial controller about whether to authorise the proposed project, then your answer should be the one that the financial controller may want to know, ie. net present value (NPV), cost of capital, constraints, non-financial factors etc.
Another example, when you are required to write a report about the performance of the company to directors, you have to write a report, this can give you format mark of about 1 mark and is very important in P level paper to earn professional marks. Again to earn good marks, your answer must satisfy the directors, show your ratios and other calculations in the appendix (professional marks may be gained from good presentation), then make financial and non-financial analysis, identifying possible causes of the ratios and linking them to the non-financial calculations (if possible), a conclusion should be given at the end. Answers like "the revenue has increased by 20% from last year, this is good" will never be adequate for the directors.
It is likely that theory questions are easy to gain marks as we will make mistake in calculations, not theory. You just have to make attempt to the questions even if you can't sure. Theory questions, in many cases, essential to pass the exam.
The keys to getting good marks in theory are:
1. Focus on answering the question - the verbs are important to note.
2. Use simple and clear English.
3. Good presentation - Use headings to ease marking.
4. Take into account the reader.
For point 4, you should ask yourself, is your answer useful for the reader? For example, if you are asked to advise the financial controller about whether to authorise the proposed project, then your answer should be the one that the financial controller may want to know, ie. net present value (NPV), cost of capital, constraints, non-financial factors etc.
Another example, when you are required to write a report about the performance of the company to directors, you have to write a report, this can give you format mark of about 1 mark and is very important in P level paper to earn professional marks. Again to earn good marks, your answer must satisfy the directors, show your ratios and other calculations in the appendix (professional marks may be gained from good presentation), then make financial and non-financial analysis, identifying possible causes of the ratios and linking them to the non-financial calculations (if possible), a conclusion should be given at the end. Answers like "the revenue has increased by 20% from last year, this is good" will never be adequate for the directors.
It is likely that theory questions are easy to gain marks as we will make mistake in calculations, not theory. You just have to make attempt to the questions even if you can't sure. Theory questions, in many cases, essential to pass the exam.
Saturday, June 18, 2011
Foundation in professionalism
As ACCA has introduced foundation in accountancy (FIA), students have an opportunity to obtain diploma in accounting and business after completed 3 papers only, namely FAB, FFA and FMA. These 3 papers have similar syllabus as F1, F3 and F2 respectively but with increased size of syllabus. However FIA students cannot be awarded the diploma until they have completed foundation in professionalism (FIP). FIP is an online module allowing you to explore and learn the key concepts of ethics and professionalism in the workplace. FIP can be done by anyone registered under ACCA, but it is a must to be completed in order to get diploma in accounting and business.
It is important for FIA students to note about this. :)
It is important for FIA students to note about this. :)
Wednesday, June 15, 2011
Throughput accounting tricks
Sometime throughput accounting can be a difficult topic due to the difficulties of finding correct information to calculate throughput per bottleneck hour or conversion cost per bottleneck hour for throughput accounting ratio (TPAR). TPAR = throughput per bottleneck hour/conversion cost per bottleneck hour.
You must make sure you divide the correct figure to arrive at the correct numbers. The key is to be careful. If you have calculated throughput per unit, then make sure you calculate a bottleneck hour per unit (sometime given), throughput per unit/bottleneck hour per unit = throughput per bottleneck hour. If you have calculated conversion cost per annum then make sure you calculate bottleneck hour per annum as conversion cost per annum/bottleneck hour per annum = conversion cost per bottleneck hour.
Another difficulty could be the identification of bottleneck hour (sometime bottleneck resource or bottleneck process). Bottleneck is always the one that is slowest, causing problems, least capability and least capacity.
In ranking the product for optimum product mix decision, we look throughput per bottleneck hour, the highest throughput per bottleneck hour product will be ranked first. This is similar in limiting factor analysis where we rank product starting from the highest contribution per limiting factor to the least.
Finally to improve the TPAR, there are four common ways:
1. Increase selling price
2. Reduce material cost
3. Reduce conversion cost
4. Speed up bottleneck process/increase bottleneck hour/increase bottleneck resource
You must make sure you divide the correct figure to arrive at the correct numbers. The key is to be careful. If you have calculated throughput per unit, then make sure you calculate a bottleneck hour per unit (sometime given), throughput per unit/bottleneck hour per unit = throughput per bottleneck hour. If you have calculated conversion cost per annum then make sure you calculate bottleneck hour per annum as conversion cost per annum/bottleneck hour per annum = conversion cost per bottleneck hour.
Another difficulty could be the identification of bottleneck hour (sometime bottleneck resource or bottleneck process). Bottleneck is always the one that is slowest, causing problems, least capability and least capacity.
In ranking the product for optimum product mix decision, we look throughput per bottleneck hour, the highest throughput per bottleneck hour product will be ranked first. This is similar in limiting factor analysis where we rank product starting from the highest contribution per limiting factor to the least.
Finally to improve the TPAR, there are four common ways:
1. Increase selling price
2. Reduce material cost
3. Reduce conversion cost
4. Speed up bottleneck process/increase bottleneck hour/increase bottleneck resource
Exam's over!
Well you see how fast the time flies and now the exam is over, may god bless us all in our result which will be out on 22nd of August. For now just forget about the exam, it is party time and enjoy yourself well because next semester you will have to tackle the more challenging papers. ENJOY!!! :D
Monday, May 23, 2011
Exam!!!
Our exam is 2 weeks away from now, so wish you all the best in exam and remember, there is nothing to worry about. If you have not revised your studies, do them now and start practising past year questions to gain the confidence. If you have been revising consistently, good, now you can have some time to relax and continue doing some questions when you feel like doing them.
Finally, remember one thing, always study smart and not study hard, good luck, may god bless us to score good marks :D
Finally, remember one thing, always study smart and not study hard, good luck, may god bless us to score good marks :D
Thursday, May 19, 2011
F4 MYS - Remedies for breach of contract
You will be expected to be able to suggest the most suitable remedies in the given scenario and explain why you choose it. Contract Act 1950 provides two types of remedies: damages and rescission while Specific Relief Act 1950 provides two equitable remedies: specific performance and injunction.
Damages
This means the compensation for losses suffered. It will normally be given by the court if the innocent party can prove that he suffered natural loss (loss which is connected to the breach of contract) or if the loss is foreseeable by the wrong party. Substantial damages will be given to compensate most of the loss suffered by innocent party, but if the innocent party suffered little or no loss, then nominal damages (small amount of money) will be given to innocent party. In certain circumstances, exemplary damages may be given in addition to substantial/nominal damages by the court to penalise the wrong party even if no loss has been suffered by innocent party.
In summary, use damages only if the innocent party suffered actual losses or losses which are foreseeable by the wrong party.
Rescission
This means to end the contract and both party returns to original position before contract. In this case, whatever benefit that the innocent party received must be returned to the wrong party and wrong party must do so as well.
Rescission is suitable if the contract is not so important for the innocent party.
Specific performance
This is a discretionary order by the court to request the wrong party to continue performing the contract. Since it is discretionary, court will not always order it as court will have to supervise the performance by the wrong party if order is made. Normal situations that court will order specific performance include:
1. Money is not enough to compensate the innocent party.
2. The amount of actual damage is difficult to ascertain.
3. Court will presume that breach of contract to transfer immovable property cannot be adequately compensated by money.
However court will not grant specific performance if money is enough to compensate the innocent party or it requires a lot of time from the court to follow-up the performance by the wrong party.
In summary, apply for specific performance if the innocent party wishes the performance of the contract to be completed and that money will not be sufficient to compensate the innocent party for non-performance of the contract. A good example will be when the contract is about some rare items or good prices.
Injunction
This is a preventive relief granted again at the court's discretion, this will prevent the wrong party from continuing the performance which will breach the contract. There are two types of injunctions:
1. Temporary injunction - court will grant this when there is no sufficient evidence to confirm that the wrong party's action will breach the contract.
2. Perpetual injunction - court will grant this when it is confirmed that if the wrong party continues the action, he will breach the contract.
In summary, injunction is suitable when the innocent party finds out that the wrong party is going to breach the contract which is important for the innocent party.
Example: Chicken enters into a contract with Duck to sell 100 chickens at RM250 and deliver to Duck in one week time. Duck paid RM50 to Chicken as initial payment and will pay the rest upon receiving the chickens. However as the inflation rate rose, Chicken refuses to perform the contract (RM50 is not returned to Duck) on the ground that RM250 is too less and should be RM400, then requiring Duck to pay RM350. Duck believes that Chicken has breached that contract and he knew there is something wrong with the conduct of Chicken, so he seeks your advice of which remedy is best in this case.
Tips: Damages is not suitable as Duck has not suffered any loss so far, Duck wants the price to be RM250 so rescission is again not suitable. Injunction is only useful if the contract is not yet breached.
Solution:
The issue here is whether Duck can compel Chicken to sell the chickens at RM250 by obtaining the order of specific performance.
According to Specific Relief Act 1950, specific performance is a discretionary court order requiring the party who breached the contract to perform his obligation under the contract. However, court will not grant the specific performance if money is enough to compensate the plaintiff's loss or if it can create great burden to the court, probably requiring long supervision period of following up the performance by the defendant. Court may grant the order if money is not enough to compensate the loss suffered.
In this case, since Duck has not suffered any losses (the RM50 is not considered as loss), damages is not a good remedy to go for. Compelling Chicken to sell 100 chickens at RM250 to Duck is not a complex issue, so it is quite probable that it does not create burden to the court.
In conclusion, Duck is advised that he has a good chance of obtaining the order of specific performance and so he may be able to get the price of RM250 from Chicken, then he will only need to pay another RM200.
The above is a very easy question, so you can easily identify the suitable remedy, however when you face some more difficult scenarios, always think what remedy will benefit the innocent party the most.
Damages
This means the compensation for losses suffered. It will normally be given by the court if the innocent party can prove that he suffered natural loss (loss which is connected to the breach of contract) or if the loss is foreseeable by the wrong party. Substantial damages will be given to compensate most of the loss suffered by innocent party, but if the innocent party suffered little or no loss, then nominal damages (small amount of money) will be given to innocent party. In certain circumstances, exemplary damages may be given in addition to substantial/nominal damages by the court to penalise the wrong party even if no loss has been suffered by innocent party.
In summary, use damages only if the innocent party suffered actual losses or losses which are foreseeable by the wrong party.
Rescission
This means to end the contract and both party returns to original position before contract. In this case, whatever benefit that the innocent party received must be returned to the wrong party and wrong party must do so as well.
Rescission is suitable if the contract is not so important for the innocent party.
Specific performance
This is a discretionary order by the court to request the wrong party to continue performing the contract. Since it is discretionary, court will not always order it as court will have to supervise the performance by the wrong party if order is made. Normal situations that court will order specific performance include:
1. Money is not enough to compensate the innocent party.
2. The amount of actual damage is difficult to ascertain.
3. Court will presume that breach of contract to transfer immovable property cannot be adequately compensated by money.
However court will not grant specific performance if money is enough to compensate the innocent party or it requires a lot of time from the court to follow-up the performance by the wrong party.
In summary, apply for specific performance if the innocent party wishes the performance of the contract to be completed and that money will not be sufficient to compensate the innocent party for non-performance of the contract. A good example will be when the contract is about some rare items or good prices.
Injunction
This is a preventive relief granted again at the court's discretion, this will prevent the wrong party from continuing the performance which will breach the contract. There are two types of injunctions:
1. Temporary injunction - court will grant this when there is no sufficient evidence to confirm that the wrong party's action will breach the contract.
2. Perpetual injunction - court will grant this when it is confirmed that if the wrong party continues the action, he will breach the contract.
In summary, injunction is suitable when the innocent party finds out that the wrong party is going to breach the contract which is important for the innocent party.
Example: Chicken enters into a contract with Duck to sell 100 chickens at RM250 and deliver to Duck in one week time. Duck paid RM50 to Chicken as initial payment and will pay the rest upon receiving the chickens. However as the inflation rate rose, Chicken refuses to perform the contract (RM50 is not returned to Duck) on the ground that RM250 is too less and should be RM400, then requiring Duck to pay RM350. Duck believes that Chicken has breached that contract and he knew there is something wrong with the conduct of Chicken, so he seeks your advice of which remedy is best in this case.
Tips: Damages is not suitable as Duck has not suffered any loss so far, Duck wants the price to be RM250 so rescission is again not suitable. Injunction is only useful if the contract is not yet breached.
Solution:
The issue here is whether Duck can compel Chicken to sell the chickens at RM250 by obtaining the order of specific performance.
According to Specific Relief Act 1950, specific performance is a discretionary court order requiring the party who breached the contract to perform his obligation under the contract. However, court will not grant the specific performance if money is enough to compensate the plaintiff's loss or if it can create great burden to the court, probably requiring long supervision period of following up the performance by the defendant. Court may grant the order if money is not enough to compensate the loss suffered.
In this case, since Duck has not suffered any losses (the RM50 is not considered as loss), damages is not a good remedy to go for. Compelling Chicken to sell 100 chickens at RM250 to Duck is not a complex issue, so it is quite probable that it does not create burden to the court.
In conclusion, Duck is advised that he has a good chance of obtaining the order of specific performance and so he may be able to get the price of RM250 from Chicken, then he will only need to pay another RM200.
The above is a very easy question, so you can easily identify the suitable remedy, however when you face some more difficult scenarios, always think what remedy will benefit the innocent party the most.
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