Page 1

PQ magazine magazine October 2017

18 awards up for grabs /








PQ Awards launch issue Be a winner come 2018

5 & 4 ils s ta ge de pa re e o Se r m fo

A better way of learning that’s built around you




4 different ways to study (flexible and structured options available)

Extended student support hours until 8pm on weekdays (5:30 on Fridays)

Hundreds of practice questions 4 mock exams per subject

With our redesigned courses we offer you the 3 components above to help enhance your learning experience.

01908 540 069

comment PQ


News 08ACCA exams Feedback from the latest set of exams 10ICAEW innovation Institute unveils new type of qualification 12CIPFA exams Great set of results for the June sitting 14FRC report Accountancy bodies hit the million mark Features, etc 06Mind your Ps&Qs Goodbye to CIMA; and the AAT must act now over dispiriting pass rates 17IFRS 16 How ACCA F7 sitters should tackle questions on the international standard on leases 18AAT salary survey Are you getting paid what you should be? 20Let’s get technical Tackling

the first Management Accounting Decision and Control assessment 23ACCA exams Why are the pass rates generally so low? 24Cover story We launch the 2018 awards – and we want your nominations now! 26Contracts How to ensure your contracts are watertight 27ACCA news Case study changes are afoot; and meet the world’s best P2 sitter 28CIMA view Why it pays to think positively about your studies 29ICAEW spotlight Qualification

October 2017 can boost your career prospects 30ACCA P6 Avoid the traps and pass Advanced Taxation 31Presentations CIMA has published a great guide on how to give a financial presentation 32Back to basics Tackling an Income Tax Computation 35Careers Life at EQ Accounts in Scotland; the PQ book review; and our social media round-up 38Fun stuff – and our giveaways The columnists Robert Bruce Companies should lead on improving their reporting 8 Prem Sikka Corporate governance reforms are a waste of time 10 Zoe Robinson Why learning is not just about contact time 12 Subscribe to PQ magazine It’s FREE – see page 34 or go to ABC July 2015 – June 2016


Publisher’s statement: We send a digital issue of the magazine to an additional 9,737 requested readers Free to subscribers who fulfil our terms of control Annual subscription: £35 (£50 overseas)

The PQ Awards are here! Well, here we are again – it’s PQ awards time! All we need is your nominations, and it is much simpler to enter than you might think (turn to page 24 to see how to do it). This month’s cover star is Harry Pampiglione, our current NQ of the Year. He was one of our 18 lucky winners in 2017. There are now lots more new and shiny PQs up for grabs for what will be our 15th awards ceremony. Winning a PQ can be a real spur to your career. Just ask Emma James – our very first PQ of the Year (see page 12). CTA and BFP The Chartered Institute of Tax has unveiled some positive changes to its qualification this month too (see our lead news story on page 8). Making the qualification ‘open to all’ will help CTA become a primary qualification. It feels that the tax qualification has finally taken its rightful place at the top table. Meanwhile, over at the ICAEW we have the new Business & Finance Professional. This exciting new designation is aimed at A-level PQs who don’t want to go on to the full ACA. So this is probably the first real PQ qualification. It will be interesting to see if other bodies follow suit. Exam time Finally, let’s not forget it is exam time, and we have collated ACCA sitters’ feedback on the September sitting. There seems to be a growing demand for a rethink on the sheer size of the actual questions at the ‘P’ level. Students feel they have too much to assimilate and are finding the three hours and 15 minutes not long enough to get the job done. Some want the exam to be extended by 15 minutes, but this is where problems start. The exams used to be three hours and now the 15 minutes extra time doesn’t seem long enough. Surely the answer is for more concise exams – here at PQ we think three hours is long enough. Graham Hambly, PQ magazine editor –

Stay On Track With CIMAstudy Prime CIMAstudy is the only online learning resource reviewed and approved by CIMA, with over 120 hours of e-learning content per module, plus interactive tests and exercises to check your understanding and keep you on track.

Introductory tutor-led webinar

Study planner to help you keep on track

Online versions of CIMA study materials

Visit our website to try a free demo. Working in partnership with Kaplan our approved study materials provider.

AAT courses the way you want to study

Your feedback - our actions We’ve listened to your feedback and completely redesigned our courses to create a learning experience that’s built around you, with a promise that no matter which study method you choose, you’ll have the confidence, flexibility and support to pass your exams first time

“I need to be able to fit my studies around my day-to-day life without too much interference”

“I want help quickly so I can resolve issues when they’re fresh in my mind”

“I’m unsure how to fund my studies”

If you’re in a pickle, our tutors are available to contact instantly via Live Chat, email or request a callback. We’re staying open longer too with tutors available on evenings and weekends to answer your queries to make sure you can move on in your studies.

“I need more support than an email or phone call when I get stuck” You can sign up for proactive tutor support and we’ll make regular contact with you to check you’re progressing at a rate you’re comfortable with and keep you on track and motivated throughout the course and ahead of your exams.

We completely understand the importance of finding a provider that can cater for your learning style and a course that fits around your life. At Kaplan we have 4 different study methods on offer and you’ll get extra resources and support no matter which you pick.

Studying can be expensive so we have several convenient payment options available. You can choose from interest free payment plans, government backed Advanced Learner Loans or Apprenticeships to accommodate your financial situation if paying the fees up-front is not realistic

“I worry about passing the exams” With mock exams and a wealth of practice questions you’ll be able to test your knowledge, hone your technique and get confident. You’ll get feedback highlighting what you got right and wrong, so you can focus your time on the areas you need to improve. Kaplan students consistently achieve a 94% pass rate**, which means that you can be confident in success when studying with us.

To find out more about our new AAT courses, visit, or call our friendly customer service team on 01908 540 069 ** 94% pass rates AAT pass rate of 94% based on first time pass rates for all Level 2 students from Sept 15 - Aug 16.

PQ have your say

email Farewell, CIMA It is with regret, but equal relief, that I have decided to call time on my CIMA journey. I am one module short (F3) from sitting the Strategic Case Study, and I’m sure many of you will be reading this thinking I am crazy. But the truth is this: this qualification, more so the direction it has taken by way of examination, has destroyed me as a person. I have sailed close to the wind with my marriage, and my three children must wonder who the hell I am come exam time. CIMA has failed us students. Multiple attempts to pass these OTs, at huge financial costs, with

inadequate study materials and zero feedback to speak of, are not what you would expect from an institute of this magnitude – but

maybe that’s the problem. Have they lost sight of everything in their quest to be the biggest and best by ignoring the next generation of members – that is current students? I’m sorry but to try to get through this qualification, with its awful testing environment, while having a family life and children, is bordering on the impossible. Did I mention I have a full-time job too? I’m taking a break and I’m going to have a look around at other institutes. I think I would rather take on more exams that will be examined in the traditional

method rather than hoping I’ve picked an option that was ‘more right’ than the other three options. I mean, what do we really learn from poorly worded objective tests? Did the old syllabus really need to be put out to pasture? Don’t even start me on the ‘don’t give up’ emails in the aftermath of failing. So there you go. I’m sure I have said what many think but are perhaps afraid to say. Time I will never get back has left me bitter and, in truth, I would only be completing this qualification to spite people rather than wanting to have it. That’s no way to approach anything. Name and address supplied

Our star letter writer wins a fantastic PQ memory stick! AAT must act now

There has been a lot of coverage in PQ about the problems the AAT had with MDCL and the Level 3 synoptic, AVSY. However, problems persist. AAT Level 3 and 4 students have now received their results from the July sitting and there are many disappointed and angry students out there. There continues to be big problems with these particular assessments – AVSY and the level 4 synoptic PDSY. A number of training providers I know are reporting pass rates of 30% or lower on both these exams. Such ‘ACCA-style’ pass rates are now blocking Level 3 students from moving up to Level 4. Naturally, there is then a knock-on effect on pay levels and career aspirations. I believe the AAT must release all pass rates without further delay. It must also explain what it is doing in terms of support and resources to help students and training providers overcome these very poor pass rates. A concerned tutor, name and address supplied

Going backwards

When I was the chair of education at one of the leading accountancy bodies I was determined to find out

rates – we shouldn’t be penalising students if they were good enough! However, there were some still prepared to argue that it was the job of the body to keep the qualification prestigious by not passing too many students. That attitude and those people need to go, and allow the bodies to become 21st century professional organisations that provide true opportunity, fairness and competent assessment systems. Name and address supplied

I need

Proper rates please!

why our pass rates had remained static for about 25 years. My concerns were that if one was in, say manufacturing, and all inputs had improved (quality of materials, equipment, employees, etc), and the failure rate at the end had remained the same, then it was

reasonable to assume that there is something wrong with the quality control. In our institute there had been improvements in training and in the quality of students, but pass rates had still not gone up. I said that if everything was right then we should be looking at 90% pass

Sorry CIMA and PQ magazine, but I have a problem with the way the OT pass rates are ‘presented’. I think CIMA is trying to get one over on us lowly PQs – but we aren’t stupid! Take P1, for example. The firsttime pass rate is 49% and the total pass rate is a lowly 45%. But CIMA insists on highlighting the 68% overall pass rate, too. For P2, the total pass rate is 46% and the overall pass rate 75%. Students just need to know the first-time pass rate and the total. Please drop the overall stats – they should be something for CIMA’s internal meetings. Name and address supplied The editor says: Over to you, CIMA.

PQ Magazine Unit 3a, Kingfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ | Phone: 020 7216 6444 | Email: Website: | Editor/publisher: Graham Hambly | Advertising manager: Polly Thrasivoulou Associate editor: Adam Riches | Art editor: Tim Parker | Subscriptions: | Contributors: Robert Bruce, Prem Sikka, Carl Lygo, Tony Kelly, Phil Gammon | Origination and print services by Classified Central Media If you have any problems with delivery, or if you want to change your delivery address, please email

Published by PQ Publishing © PQ Publishing 2017

Pass Your CIMA Case Study with BPP More than 80% of all our students pass their Case Study Exam Take your next step to becoming CIMA qualified, with Operational, Management and Strategic Case Study courses starting throughout September and October. Our expert case study tutors will help you to analyse the preseen, revisit the key syllabus areas and guide you through a range of practice exams which mirror the format and style of the CIMA exam. You will receive one-to-one feedback and key improvement points. For more information, contact us on 03332 223 232

For more information about our CIMA course, contact us on

 03332 223 232

PQ news

ROBERT BRUCE Companies should lead the way on corporate reporting There has been much shouting about corporate governance reform recently. This is a good thing. At least it is seen as important. The Financial Reporting Council promises to update its guidance. The government has put forward its views. Red herrings have been produced. But at its heart this should not be about government regulation, however much that might cheer the onlookers. It is about a shift in ideas. And this is why the old Companies Act Section 172 has been the pivotal point in all this debate. No one has bothered with it until recently. In the past this section, which deals with the duties of directors, was assumed to mean proper reporting to shareholders. But there is no reason why it should not be wider. Why should directors not have to report on how they are ensuring the success of the company on behalf of other stakeholders, from staff to the local community? And the government agrees. A new formal reporting requirement ‘will impel directors to think more carefully about how they are taking account of these wider matters’. This, it thinks, will create transparency that will reassure everyone that companies are being run ‘with a view to their long-term sustainability’. This recognises the cultural change over recent years that has moved corporate reporting away from the narrow shareholder model to the wider stakeholder one. What we need is for companies to do this now. They don’t have to wait for regulation. They should do their own thing. Robert Bruce is an award-winning writer on accountancy for The Times

Test yourself with PQ-go

If you are an AAT studier you should remember to take a look at, to see if you are exam ready. Nigh on 600 students have already taken our free tests. This website offers students a great opportunity to test themselves against our MCQs. More are about to be added to the site, so check to see if we cover your assessment. There is also a test for ACCA F3 sitters, and there will soon be one for F4, too. 8

CTA exam makeover The Chartered Institute of Taxation unveiled its new-look CTA exams in early September, to much applause. The big story is the move to make the CTA qualification open to all from 2019. The requirement for students to have a prior qualification, which enables them to claim a ‘Confirmation of Eligibility’ to sit, will be dropped in January 2019. The move, however, comes with a warning from CIOT President

John Preston. He stressed that the CTA exams are set at a high standard and in order to give yourself the best chance of success, students who do not have a previous qualifications in accounting or law will be strongly advised to register for the Tax Pathway route to qualification ( The current ‘five sitting rule’ will also be extended to seven from 1 November. That means the exam

passed at the November 2017 sitting will be valid up until and including the May 2021 exam session. With effect from the May 2018 CTA exam session, the two Advisory exams (TOMC & ACT) will be merging into one exam – Taxation of Major Corporates. Transitional provisions for existing students have also been put in place to ensure the changes are as straightforward as possible, and the CTA is promising that the changes will not unfairly disadvantage any of its students. •For more see next month’s PQ magazine.

ACCA exam feedback The September ACCA exams were another mixed bag, according to those in the know – the sitters. While F7 was described as ‘fine’, P7 was felt to be ‘brutal’. Then there was F5, which more than one student felt was ‘easy’. Another student said P1 was a ‘brilliant’ paper, and those resitting P5 were in agreement that it was a better paper than the one in June. It was the ‘P’ papers again that got the most complaints. Students continue to struggle with time management in the P7 exam,

particularly when it comes to Q1. One PQ admitted to spending two hours on the question, leaving themselves just an hour to answer the other three exam questions. Students also seem to struggle with the P2 exam, especially when Q1 is a cash flow question. Doing this paper in reverse is a key tip to success here, said one sitter. • Check out for all the September feedback. We will also give you our take on the Examiners’ Report when they are published.

World class: Scottish student Kayleigh Milne came top worldwide in the June P3 Business Analysis exam. Milne, who works for Johnston Carmichael, said: “I put a lot of pressure on myself and get very stressed out around exam time. Life can get in the way and it can become easy to fall behind. However, if you have a plan and keep up with it, it will allow you to assess the situation on a weekly basis enabling you to stay on track.” Milne scored 92, the highest mark out of 14,515 sitters.

Future perfect

The list of top-flight speakers continues to grow for the PQ/LSBU joint national accounting conference, called ‘The Future of accountancy – success in a changing world’. ICAEW executive director Mark Protherough and ACCA’s director of professional insights, Maggie McGhee, have both agreed to be part of our panel discussion, looking at how the future might look. Among the topics covered in the breakout sessions are money laundering, making tax digital, cloud technology, big data and GDPR. We also have a whole careers stream looking at how you can create a personal brand, and we have Pro-Group MD Pat Keogh explaining exactly what employers want. To sign up for this great conference go to’s-on and drill down to 23 November, the date to put in your diary. Check out the advert on page 16 for more.

AAT rolls up its sleeves

AAT has been working hard over the summer to ensure it gets its assessment system ‘spot on’, according to Andrew Williamson, director of marketing and brands strategy. Talking exclusively to PQ magazine, Williamson stressed that, to this end, the AAT has undertaken more and more testing with training providers. He said that the AAT has rolled up its sleeves and is continuing to make changes to ensure its systems are tested, and then tested again. Although he didn’t want to shift any blame for any recent problems, Williamson said that some things were out of the AAT’s control. “Our extensive testing shows the assessments work when they leave us,” he ventured. It hasn’t helped either that AQ2016 brings in a whole new way of testing for colleges – the synoptic test. This means AAT is no longer a modular qualification and has to be taught differently. The spreadsheet elements in Level 3 synoptic have also been problematic, and Williamson said that the AAT is continuing to make changes. It also adjusted marks and added extra time to help students cope. PQ Magazine October 2017

Looking for a place? Call our clearing hotline now on 0800 923 8888

Be ambitious. Start now

January start date also available • • • • • •

BA (Hons) Accounting and Finance Top-up BA(hons) Accounting and Entrepreneurship Two year completion route for AAT Level 4 or ACCA F1-F3 holders AAT qualifications may enable direct entry into year’s 1 or 2 No 3 UK wide for student satisfaction (Complete University Guide league table 2017) No1 London University for ‘Career Prospects’ in the area of Accounting and Finance (Guardian league table 2018) No 4 in the UK Overall and No 2 for ‘Satisfied with Teaching’ in the area of Accounting and Finance

No 1 UK university for ‘Student Experience’

(Guardian league table 2018)

the area of Accounting and Finance

0800 923 88 88

Accountancy college of the year

Sunday Times League Table 2017 in

• Guaranteed halls accommodation during your first year* • Central London Location • Free gym membership • Free Microsoft Office 365 and SPSS software • Up to 9 exemptions from professional body examinations**

Numerous accreditations and professional links

*Southwark Campus only. Conditions apply, check online. **9 for ACCA, 7 for ICAEW and 5 for CIMA

PQ news

PREM SIKKA Corporate governance reforms are a waste of time The government’s latest proposals for reforming corporate governance include a requirement for quoted companies to publish the ratio between the CEO and average pay and the naming and shaming of companies where 20% of shareholders vote against executive remuneration. There is no commitment to put workers on company boards or have annual binding shareholder votes on executive remuneration. The proposals are disappointing. About 7,200 companies meet the Companies Act 2006 definition of a large company, but the government proposals will mainly apply to about 900 listed companies. Hundreds of large companies, including Arcadia Group, John Lewis Partnership, Matalan and Virgin Atlantic will be exempt. BHS, which collapsed last year, would have been exempt. Government faith in shareholders to invigilate large companies is misguided. The average shareholding duration in listed companies is about three months. Shareholders chase short-term returns and historically have shown little interest in good governance for societal interests. The proposed legislation will not arrest fat-cattery or provide good governance. That requires the ditching of the shareholder-centric model of corporate governance and democratisation of large companies. That would require stakeholders, including employees, to sit on company boards. The shame is that the government has shown no appetite for harder but durable reforms. Prem Sikka is Emeritus Professor of Accounting at the University of Essex

ICAEW unveils BFP qualification Following discussions with leading employers, the ICAEW has launched a new PQ qualification – the Business & Finance Professional (BFP). The new qualification is sandwiched between the CFAB exams and ACA qualification. BFP is a direct response to the rise in the number of A-level intakes at many firms. It was felt some of these trainees would not want to study to full ACA, but wanted something to recognise

ethics learning programme and have 12 months’ work experience to call on. BFP-qualified students will have to keep up-to-date with CPD and adhere to the ICAEW ethical rules. In return, they will be provided with a whole range of top-flight services, including employability skills.

New ACCA ethics module: do it now, say tuition firms

PQ winner: Becky Whittlestone has been named the Best Management Accounting Student at Northampton University, winning the PQ magazine prize this year. Well done Becky!

Do it and do it now is the clear advice coming from many tuition providers about the ACCA ethics module. Big changes are happening on 30 October 2017, and PQs don’t have long to make a decision about when they plan to take the ethics module, leading tutors have told PQ magazine. Currently, the ACCA ethics module takes between one and three hours to complete and is free of charge. Come 31 October, the new-look module comes with a £60 fee and will take 20 hours plus to finish. Many tutors have told PQ that ACCA students need to understand

what they face and make a real ‘informed’ choice. These same tutors stressed that the new ethics module has a lot of added value, but students may want to tick the boxes now to avoid additional costs and time. PQ magazine was even told that some students are actually excited by the new ethics module and have decided to wait for its introduction. Lots of ACCA students, however, need to make a rational choice about moving through the qualification and would be best served to take the free module now.

ICAEW publishes Advanced Level results

The ICAEW Advanced Level exam results for July 2017 show the Corporate Reporting paper continues to be by far the hardest test at the final level. The overall pass rate for Corporate Reporting in July was 79.8%. However, if you drill down into the stats you discover that for

EY’s new ‘badges’ EY is to launch its own qualifications in subjects such as AI, data visualisation and information strategy. EY Badges will help its people differentiate themselves in the market, the firm says. EY’s Nancy Altobello said the Badges will be based on the same standards around the world and will be hosted by a third-party digital platform. EY is the first professional service employer to offer digital ‘badges’ and it will be interesting to see who follows! Deloitte gets creative Deloitte has bought European marketing agency Acne to help boost its creative offering. 10

their study and work experience. Employers also wanted to tap into the ethical values being a member of a professional body provides. To obtain the designatory BFP letters students will have to pass the six CFAB papers, complete an

ICAEW ADVANCED JULY EXAM RESULTS Overall First time Case Study 77.0% 78.8% Corporate Reporting 79.8% 83.4% Business Management 86.5% 89.0%

those just sitting only this paper (431) the pass rate was 52.7%.

Among Acne’s clients are IKEA, H&M and Spotify. The firm offers creative, strategic, film and photography services specialising in the lifestyle and luxury retail sectors. Acne will become part of Deloitte Digitial. PwC fines adding up PwC has broken its own record with a £5.1m ‘misconduct’ fine from the FRC. This tops the £5m it had to pay over its audit of Connaught. PwC and Nicholas Boden, the audit engagement partner, have both been fined after admitting misconduct over the audit of the RSM Tenon Group plc. PwC’s fine was set at £6m but was reduced to £5.1m after a settlement discount. On top of a severe reprimand, £500,000 was paid towards the

That meant 47.3% of sitters (204) left the July sitting with nothing. First-time sitters didn’t do much better with a 55% pass rate. The overall pass rates for the other final level paper were 77% for the Advanced Case Study, and 86.5% for the Strategic Business Management exam.

FRC’s counsel’s costs. Boden was fined £114,750 and received a severe reprimand. What cyber training? More than two-thirds (68%) of the UK’s biggest businesses say their top board members have received no training in how to handle a cyber attack, says research from KPMG. This is despite the fact that 54% of businesses see cyber security as a top group risk compared with other threats. The worry for KPMG is that 10% of FTSE 350 companies revealed that they do not have a plan in place to respond to a cyber incident. KPMG’s Paul Taylor said: “While cyber security has cemented itself onto the board’s agenda, they often lack the training to deal with incidents.” PQ Magazine October 2017

Did you get the Case Study result you wanted?

Courses Starting Soon Book your course now



Our Objective Test courses are starting over the next few weeks and they have everything you need to keep you on track and achieve exam success.

If you didn’t get the results you wanted, our comprehensive Case Study courses include a Pass Guarantee to support you through any further resits.

Regardless of your result, planning your next step with Kaplan is easy! 01908 540 069

PQ news

ZOE ROBINSON Learning isn’t just about contact time ‘On average, economics undergraduates receive the equivalent of just 26 hours of one-to-one teaching over a three-year course’. This headline featured on many websites recently. The debate that ensued was about value for money for undergraduates, and it does raise some interesting questions about what students should pay for and what helps them learn most effectively. So does contact time really matter? Accountancy students have a lot of choice as to how they can study, with a scheduled programme driven by a tutor, or something more flexible, allowing the pace and timings to be dictated by the individual. In the latter case, the contact time is less than for a structured course and most of the time this is reflected in the price. However, very little real learning actually takes place when the tutor is talking and the student simply listening; if you ask a question and get an answer, then perhaps. Learning becomes most effective when you sit quietly in a room and ask yourself, ‘what does this mean?’ Or, more often, ‘can I answer this question?’ You are then forced to reflect and replay the events of the day in the context of a problem to solve, and it is this that is actually the most valuable part of the learning process. You do, however, need contact time, but it’s probably best used to offer feedback, direction, motivation and support – but not learning. Zoe Robinson is Learning and Programmes Director at Kaplan Financial

CIPFA’s ace exam results CIPFA’s June results are out and they all look great – except for the Public Service Financial Reporting (PSFR) paper. There were some really good paper pass rates in June, particularly at the Strategic (final) Level. Those sitting Audit & Assurance achieved the top pass rate in the summer exams – 94.3%. The Corporate Governance & Law paper pass rate was also healthy, at 89.5%. However, the institute quickly acknowledged the pass rate of PSFR at 40.5% “is significantly below that of previous sittings and is also significantly below that of the subject prior to candidates sitting their exams online”. The examiner said that answers to the exam highlighted that many candidates were not able to complete basic, non-sector specific financial accounting adjustments, or able to demonstrate the level of evaluation and application of knowledge expected at this level of

CIPFA JUNE 2017 RESULTS Professional Certificate Financial Accounting Management Accounting Company Financial Reporting Audit & Assurance Professional Diploma Public Service Financial Reporting Taxation Corporate Governance & Law Business & Change Management Strategic & Policy Development Financial Management Strategic Strategic Public Finance Strategic Case Study

Jun 17

Nov 16

Jun 16

69.0%% 86.7% 82.3% 94.3%

80% 94.9% 63.2% 82.3%

75.6% 84.6% 55.7% 90.7%

40.5% 88.6% 89.5% 88.6% 81.3% 65.9%

61.4% 75.4% 84.5% 58.7% 81.9% 69.1%

71.6% 94.1% 86.5% 80.8% 84.4% 55.5%

69.2% 79.4%

66.4% 73%

72.0% 78.7%

exam. In order to assist future candidates CIPFA has released the June 2017 exam questions from the live exam question bank. The examiner has also provided more guidance on how to best approach the PSFR exam questions with seven webinars. Two other factors were identified: • The June 2017 exam did not

include a 15-mark question covering local government financial statements. Many students tend to focus their revision in this area and perhaps this explains in part why the pass rate is so low this sitting. • Students who hold exemptions from other financial exams achieved a pass rate of 33.3%, compared with non-relevant undergraduates of 83.3%.

You too could win a PQ!

The FRC launches new-look website

There are 18 PQ trophies up for grabs this year as we go in search of our PQ magazine award winners. Winning a PQ can really take you places. Just ask our first-ever PQ of the Year, Emma James (pictured). Our Emma is now a senior lecturer at Swansea University’s School of Management. And she is still picking up awards – she was recently presented with the university’s Excellence in Learning and Teaching Award. She is obviously loved by her students. Check out how to win one of our awards by turning to page 24 – it’s easier than you think! As we always say, you can’t win it

if you aren’t in it (we say it every year). So get nominating – fill in our nomination form and get an invite to the hottest party in town.

A new Financial Reporting Council website was unveiled on 30 August. It introduces a fresh, modern design, with new features to support the FRC’s role in promoting transparency and integrity in business. In line with the FRC’s outreach to all sections of society the new make-over will allow stakeholders to select options most relevant to their needs, with smoother navigation through to news, reports and information. The website “will be more flexible and focus on the needs of stakeholders,” said an FRC spokeswoman.

ADIT exam record Record numbers of students sat the June 2017 Advanced Diploma in International Tax this June, with just under 700 students sitting exams in a record 47 cities across the world. The Chartered Institute of Taxation (CIOT) announced that 490 students passed at least one June exam, out of a record total of 675 sitting exams. ADIT exams were taken for the first time this summer in Austria, Cameroon and Papua New Guinea.

Calls for policy U-turn Has the UK government been dramatically overstating the number of overseas students who remain in the UK after they finish their studies? This is what many front papers of the national newspapers were asking recently. Ministers will be facing new pressure to remove overseas students from the net migration targets after statistics showed 97.4% of students complied with their visa and left the country after they finished their studies.

How long should you stay? So how long is it acceptable to stay in one company before you move on? A new study found that nearly half (47.2%) of accounting professionals believe it’s acceptable to leave a job after less than a year. A quarter of accountants felt job hopping was fine “if a better opportunity comes along you should take it”. The same (25%) said it was also acceptable to move as “circumstances often change”. • See page 35 for more career news.

In brief Take a classical approach Thousands of students are turning to classical music to help them relax as they study, according to the latest ratings from Classic FM. Often considered the cultured preserve of the middle-aged, the radio station has added nigh on 250,000 new listeners under 35 in the past three months. Classic FM has a total audience of 6m. Scientific studies continually show that listening to classical music can boost students’ marks. • See page 38 for more fun stuff! 12

PQ Magazine October 2017

Go places. Become an ICAEW Chartered Accountant.

With a focus on innovative thinking, ethics and leadership, ICAEW Chartered Accountancy creates insightful leaders with integrity. Choose the ACA qualification and you’ll be able to go further than you’d imagine.

ICAEW. More than you’d imagine.

PQ news

Quarterly reports on the way out

List company quarterly reports could soon be assigned to the history books. The Investment Association has said that the number of companies producing such reports is now in rapid decline. More than 40% of FTSE 100 and 60% of FTSE 250 firms no longer issue quarterly reports. That is a decline of 19% and 25% respectively on October last year. The Investment Association has been calling for all listed companies to stop producing earnings guidance and quarterly updates because it causes shorttermism.

More than a million strong UK and Irish professional accountancy bodies now have more than half-amillion members and half-a-million students worldwide signed up. The seven bodies in the latest Financial Reporting Council’s (FRC) report ‘Key Facts & Trends in the Accountancy Profession’ say they have over 350,000 members in the UK and Republic of Ireland and over

515,000 members globally. In all, 25,242 students became members during 2016, and just under 15,000 of these became ACCA members. The next highest total was CIMA with 4,958 new members. The FRC also revealed that the total percentage of female members has increased

from 33% in 2012 to 35% in 2016. ACCA has the largest proportion of female members (46%). The ICAEW has the lowest, at just 28%. There are also now 164,000 students in the UK and Republic of Ireland studying to become qualified accountant. The seven have a total of 576,000 students worldwide. That translates to a 0.7% increase of in the UK and RoI and a 2.9% increase worldwide. What these figures don’t show, however, is the decrease in student numbers at the AIA, CIMA and CAI.

What’s new at

We put lots of great articles online first. There’s also lots on there that doesn’t get in the mag!

Are you exam ready? Not sure? Then test your knowledge by going to

NEWS We provided feedback on the ACCA September sittings as they happened. It was all cash flows at P2 and no cash flows for F7! You can also discover who the winners are to our fantastic giveaways each month. Our news pages looked at sin taxes, data protection laws and how an accountant avoided jail

by claiming their employer was sexist! STUDY ZONE We will put our take on the ACCA Examiners Reports here, looking at whether they are still helping sitters. Recent reports have talked less about what was in the exam and concentrated more on exam technique.

NQ MAGAZINE Don’t forget our bi-monthly sister eMagazine – NQ magazine. The latest issue has a great piece from Josie Gowler, head of finance and research at the Medical Research Council. You can download it at

A leading qualification for a changing world New Ethics and Professional Skills Module replaces the Professional Ethics Module from 31 October 2017 Our new Ethics and Professional Skills Module focuses on developing the complete range of ethical and professional skills employers told us they need. Taught via real-world business situations, you will cover ethics and professionalism, personal effectiveness, scepticism, leadership, communication and interpersonal skills. Although you are not required to complete if you have already taken the current Professional Ethics Module, it will give you the ideal grounding to start your Strategic Professional Exams so you may choose to sit this module as well.

For more information visit:


PQ Magazine October 2017

BITE-SIZED LEARNING WHEREVER YOU CHOOSE Flexible online AAT and ACCA courses Pass rates up to 95%*

Visit or call 020 7173 5877 *based on AVADO F1 student sitting the March 2017 exam

Training Provider

AWARDS 2016 Winner

For accounting professionals of any seniority working in all sectors. Expect expert speakers from leading accounting bodies and organisations, touching upon topics such as careers, technology in the accounting space, and the impact that digital is having on the industry. Speaker topics and areas: • Digital accounting: sage and big data • Career enhancing: how to get headhunted, skills for today, your personal brand • Employer focus: apprenticeships, skill sets for today, wellbeing of staff

National accounting conference

23rd November 2017 9am-7pm

This is a free to attend event, but we encourage you to sign up today, as spaces are limited and are expected to sell-out quickly. For more information please visit

Keyworth Centre, LSBU In association with PQ Magazine

Sign up today


A leading qualification for a changing world Session Computer-Based Exams (CBEs) now available for F5 – F9 CBEs are a computer-based exam format that have been designed to reflect the modern working environment and demands of employers today. They cover the same learning outcomes as the equivalent paper-based exams, so you answer the same questions using the tools used by today’s finance professionals. Your F5 to F9 exams can be taken via the computer-based exam format during our four exam sessions each year in March, June, September and December. So why should you take CBEs instead of our paper-based exams? • • • • •

Session CBEs build your workplace skills Your answers are always clear and easy to read It’s quicker and easier to edit answers No more sore hands from writing Navigation tools help you manage time more effectively

For more information visit:


Get your head around IFRS 16 Kevin Hudson explains how F7 sitters should tackle questions on the international standard on Leases


rom the September 2017 ACCA exam sittings a new IFRS standard is examinable within F7 Financial Reporting. IFRS 16 Leases has replaced IAS 17 Leases, and the good news for F7 students is that accounting for leases would seem to be more straightforward. Other than low-value assets or leases of less than 12 months, all leased assets are now recognised on the statement of financial position as right-of-use assets. Initial recognition At the inception of the lease, the lessee is required to recognise as a liability the present value of all anticipated lease payments not yet paid. The present value will be calculated using the interest rate implicit in the lease and, if F7 continues to examined as it has been previously, it is likely that both the present value and the interest rate will be provided within the question. Having recognised the liability, the lessee also needs to recognise the asset, described as a right-of-use asset by IFRS 16. The value at which the asset is recognised will, in many cases, simply mirror the initial liability value, but may additionally include any payments made to the lessor prior to the commencement of the lease, for example where the lease payments are being made in advance rather than in arrears. The lessee would also capitalise any costs normally capitalised under IAS 16 Property, Plant and Equipment, such as professional fees. Subsequent measurement Each year the liability is increased by the value of the interest charged (debit finance cost, credit liability), and reduced by any lease payments made (debit liability, credit bank). The interest charge is calculated by multiplying the outstanding liability by the interest rate. The right-of-use asset, once capitalised, may be measured using the cost or revaluation model, but it is likely within F7 that any asset would be measured using the cost model. Depreciation is calculated on the straightline basis, writing the asset off over the period of the lease, unless ownership of the asset is transferred at the end of the lease, in which case the asset is depreciated over its useful life (debit depreciation expense, credit asset). Presentation The asset is presented within non-current assets and the liability is split between its current and non-current elements. The simplest way to calculate the liability split is by using a table, showing interest charged and lease rentals paid. The non-current liability is calculated as the balance outstanding immediately after next year’s payment is made, and the current liability is the difference between the total year-end liability and the non-current liability. As an example let’s use a four-year lease with a present value of future lease payments of $24,000, annual payments in arrears of $7,570, and an implicit interest rate of 10%. The first year of the lease liability table would look like this:

PQ Magazine October 2017

$ Year 1

Balance b/f 24,000

Interest at 10% 2,400

Paid (7,570)

Balance c/f 18,830

Interest is calculated on the initial liability at 10%. This is added to the liability, and the payment at the end of the year deducted. We are left with a total liability of $18,830, but we need to split this between its current and non-current elements. To do this we perform the calculations for the second year to determine the liability outstanding immediately after the payment in Year 2. This will be our non-current liability: $ Year 1 Year 2

Balance b/f Interest at 10% 24,000 2,400 18,830 1,883

Paid (7,570) (7,570)

Balance c/f 18,830 13,143

Having calculated the non-current liability of $13,143 above we can then calculate the current liability as $5,687 ($18,830 – $13,143). The asset in the above example would initially be recognised at $24,000, then depreciated over the lease period of four years, giving an annual charge of $6,000 in the statement of profit or loss each year. For leases where payments are made in advance the liability table above would be amended to deduct the lease rental paid before calculating the interest charged. The non-current liability would still be the balance outstanding immediately after next year’s payment is made, with the current liability calculated in the same way. This topic could be tested in any section of the F7 paper, as a standalone or scenario-based Objective Test (OT) question in Section A or B, or as part of a financial statements preparation question in Section C. The key to successfully dealing with leases, as with much of the F7 paper, is to take a calm, logical approach and make sure that you read the question carefully. PQ • Kevin Hudson, F7 Content Specialist Kaplan Financial


PQ AAT salary survey

What are you worth? The AAT has released its 2017 Salary and Career Survey – and it makes interesting reading

Scotland Student member Affiliate member F/MAAT member


ast month we revealed that the AAT’s latest salary survey had discovered that its female students earn 9% more than their male colleagues. But what are they actually earning, we hear you ask! Well, the current average salary for female students in the UK is £19,500; it is just £17,704 for their male counterparts. Affiliates earned on average £22,189 (female) and £21,000 (male). The figures show student and affiliate salaries have increased by 2% and 5% respectively since 2015. That’s not great news for students! It’s when men get to F/MAAT level that they earn more than their female colleagues. The average salary in 2017 for quailifed male AATs was £27,000, compared with the £26,500 earned by women at the same stage of their career. The survey found that 77% of students agree that studying for an AAT qualification has increased their earning potential, and 73% of students said they are satisfied with their current job. Within the last year 32% of AAT members received a bonus. The average bonus was 3% of salary at student/affiliate level and 4% for full and fellow members. We thought you might also like to see the current salaries being earned around the country, so here they are… PQ

North East Salary £20,250 £20,000 £27,115

Student member Affiliate member F/MAAT member

Salary £17,290 £18,000 £23,000

Yorkshire/Humber Student member Affiliate member F/MAAT member

Salary £18,000 £21,000 £25,000

East of England Student member Affiliate member F/MAAT member

East Midlands

North West Student member Affiliate member F/MAAT member

Salary £18,302 £22,204 £27,500

Salary £17,500 £21,000 £25,000

Student member Affiliate member F/MAAT member

Salary £18,000 £19,500 £25,000

West Midlands Salary £17,500 £20,000 £24,892

Student member Affiliate member F/MAAT member SALARY BY UK REGION As in 2015, London is again the top-paying region across all membership levels. The biggest difference between top and bottom paying regions is at full/fellow member level: full-time salaries in London and 48% more that those in North East England. These salaries represent the average (median) for AAT members working full time (non licensed accountants). 18

Wales Student member Affiliate member F/MAAT member

Salary £18,000 £20,000 £25,000

London South East

South West Student member Affiliate member F/MAAT member

Salary £19,000 £21,625 £25,000

Student member Affiliate member F/MAAT member

Salary £20,000 £23,690 £28,000

Student member Affiliate member F/MAAT member

Salary £23,250 £26,000 £34,000

PQ Magazine October 2017



With our award-winning team of tutors, outstanding online learning platform, comprehensive study materials and our pass-first-time guarantee*, we’ll make sure you are on your way to ACCA success.

Book 3 papers before September 30th, and get 2 additional ones for


WHY SHOULD I BOOK? You are already saving £1,200 by combining tuition and revision papers in comparison to other available packages Get an extra £1,590 worth of savings when using this offer * Live classes mean real-time interaction with tutors and fellow classmates Pre-recorded revision videos available 6 weeks before exams Award-winning tuition and a pass guarantee *

ENROL TODAY +44 (0) 20 3535 1274

* Terms & Conditions Apply.

PQ AAT exams


Nick Craggs walks you through the first Management Accounting Decision and Control assessment


recommend to all my students that they use the AAT’s sample assessments as part of their exam preparation; they are great practice for the exam. Not only are they written by the people who write the real assessments, but they also use the same software as the real exam. However, for various reasons, AAT gives students the answers but they don’t explain the answers. As a tutor at First Intuition I get asked to explain some of the answers by students if they can’t follow where a figure has come from. So in this article I thought I would do something different, and work through an AAT sample assessment. I have chosen the first Management Accounting Decision and Control assessment as this is a unit students have found challenging. Task 1a is a nice straightforward question, about cost behaviour. The first cost you need to calculate is the direct material cost. The material cost per unit is 2.55 kg at £3.20 per kilo, so the cost per unit is 2.55 x £3.20 = £8.16 per unit. We have been asked for the total cost at two levels of production, 3,800 units and 15,900 units. Material is a variable cost as we have a cost per unit, so the total cost at these levels of production will be 3,800 x £8.16 = £31,008 and 15,900 x £8.16 = £129,744. The next cost is rent. This is £7,450 per quarter and doesn’t go up or down with production, so this is a fixed cost. Therefore this will be £7,450 at both levels of production. Then we have the leased machines, which cost £7,522 for every 5,000 units produced. This goes up in fixed steps of 5,000 units, so this is a stepped cost. So in this question we need to calculate how many ‘steps’ we need for the level of production we have, I like to think of these ‘steps’ as individual machines. At the first level of production we are only producing 3,800 units. We can’t lease part of a machine, so we need to pay £7,522 for one machine, which will cover 5,000 units, even though we only need enough for 3,800 units. At 15,900 units we clearly need more than one machine. So to calculate how many steps we need we divide the


number of units we need by the number of units each machine can produce, which is 15,900/5,000 = 3.18 machines. We can’t hire 0.18 of a machine so we need to round up to four machines as rounding down to three machines would only allow us to produce 15,000 units, which isn’t enough. So the cost for four machines is 4 x £7,522 = £30,088. Finally, we have been given the maintenance costs, which are a fixed cost of £2,150 per quarter and then a variable cost of £2.07 per unit. So this is a semi variable cost. The variable element at 3,800 units which will be £2.07 x 3,800 = £7,866. Onto this we need to add the fixed cost of £2,150, so the total cost is £10,016. When production is 15,900 units the variable element is 15,900 x £2.07 = £32,913, which when we add on the fixed cost gives a total cost of £35,063. Task 1b is a reasonably easy question using the high low method. We are told that at 19,000 units the total cost is £295,000 and at 23,900 units it is £324,400. So the total cost has increased by £29,400 because you have produced an extra 4,900 units, so the variable cost per unit is £29,400/4,900 = £6 per unit. At 19,000 units the variable element must be 19,000 x £6 = £114,000. If we deduct this from the total cost of £295,000, we are left with the fixed element of £181,000. We are then asked for the fixed and variable cost at variable levels of production. We just multiply the level of

production by the variable cost per unit to get the variable cost. The fixed cost is £181,000 but we are told above 30,000 units the fixed element will increase by £12,000 so at 36,000 units the fixed cost is £193,000. In task 1c we are asked to calculate the cost of transporting one passenger one kilometre. We are given the average number of passengers per bus, the average distance travelled and the number of journeys for three buses. We need to calculate the total number of passengers transported one kilometre. So we multiply the number of journeys by the average distance travelled by the average number of passengers. This gives a total of 29,820. Then if we divide the total costs of £68,586 by 29,820 we get a cost per passenger per kilometre of £2.30. The last task is a true false question (never leave these blank!). The prime cost is just the direct costs, not overheads, so the first statement is false. When calculating the full production cost you do have to include all fixed and variable costs. That is task 1 done, and you now have 16 marks. Only another nine tasks to go... You can see the remaining tasks on our blog – go to You can sample the sample assessments here if you are an AAT student: training/study-support/search PQ • Nick Craggs is a tutor at First Intuition

PQ Magazine October 2017

You ask. We listen. P Award-winning e-learning

Personal tutor support

Benefit from interactive videos and our innovative individual learning programme.

Instant access to ACCA, FCA and AAT qualified tutors via phone, email, Skype, Twitter and our learning portal.

AAT Distance Learning Training Provider 2017

Pass Promise

Price Match

We will tutor you until you pass. (Students must be actively and continuously studying. Please see our T&Cs for more information.)

Find another provider that marked assignments, mock exams and e-learning tools, and we'll match their price.

“Our winner was able to demonstrate a huge amount of support for their distance learners. They have worked hard to ensure that studying via distance learning doesn’t have to be a lonely experience. From tutor, career and online support, they were able to demonstrate how they really go the extra mile for their students. The submission was passionate and included outstanding student testimonials, examples of their visual study tips as well as their Accounting catchphrase game! The winner of Distance Learning Provider of the Year is: Premier Training” Mark McBride (AAT President)

Prices start from £299! See our website or call our friendly course advisors for a full range of courses and fees.

01469 515444

www PQ magazine

BKN Training Provider

Training Provider

Training Provider


Training Provider Awards 2014






Accounting Training Provider of the Year

Distance Learning Provider of the Year

Distance Learning Provider of the Year



Best use of e-learning Best use of e-learning

Live chat

Enrol anytime of the year AWARDS Study at your own pace 2014 Direct tutor support WINNER Award winning

BKN Training Provider Study Resource of the Year


Pass first time with "Lovely staff, always go the extra mile to help out students. Wouldn't study anywhere else." Julie, ACCA student

Ginny (FI tutor)

Hi Ginny, quick question - what is the difference between CSR Strategy and Strategic CSR? 21:09

The strategy is how the organisation is going to implement CSR, strategic CSR is the big picture rationale for carrying out CSR. Hope that 21:11 helps :)

It does! Thank you!

21:15 @studywithfi /firstintuition @first_intuition With classroom centres in

Bristol 01173 540190

Cambridge 01223 360405

Chelmsford 01245 209900

Leeds 01134 677770

London 02073 239636

Luton 01582 733900

Maidstone 01622 755100

Manchester 01612 286564

Reading 01189 504173

Southampton 01189 504173

ACCA exams PQ

Just why are ACCA pass rates so low? The old adage is true. If you fail to prepare for the ACCA exams then prepare to fail, writes Paul Merison


ere is an actual email from a student, typical of what I receive. I got this 12 days before P7 exam day: “Please can you advise me if there are any changes to the P7 syllabus from September 2017. I have failed P7 four times. Twice I have self studied and twice I have used online tutorials as they are cheaper. Three of my results are between 42% and 47%.” This student is almost guaranteed to fail again, because: • Getting similar marks each time shows a problem exists and is not going away. • They have not submitted any specimen answers to their tutor, who could help them work through any problem areas. • They have no clue about what is on the syllabus, and presumably the recent examiner’s article on P7. When I received the email there was less than two weeks to go before the exam. Before we start, let’s remember that ACCA is open access and so there are lots of students attempting exams who attend no courses. Many are watching stolen video classes from previous sittings (which means no tutor help is available). This will always hold the pass rates down. However, I am frequently dealing with students who fail repeatedly, especially ‘wordy’ papers like P7. So what is common to these students? • They do not do marked exam practice. The vast majority do not attempt a mock exam or submit homework. This is like trying to pass a driving test without having any driving lessons with an instructor pointing out your errors. • They believe it is all about memorising things. A worryingly large number think the secret of passing is memorising theory, rather than understanding those theories, and then attempting to explain them in their own words, and applying them to scenarios. • They have no interest in the real business world. Exam questions often try to mimic real world stories. Why get an accounting qualification if you have no interest in the world where it is useful? • They don’t really try. I used to teach ICAEW courses in the past, and students expect to be made to practise in class when they attend. Every one of them will sit the mock exam. For ACCA, many take PQ Magazine October 2017

a bathroom break when a question is set, only returning when the tutor shows them what to do. • Lack of writing skills. Many students write things that are vague and unclear. Their technical knowledge might be correct, and they might even know how it applies to the scenario – they just seem unable to put it into words in a convincing fashion, and the reason for that is… no marked practice! Resit students • When students fail a paper, they frequently ask their tutor what went wrong. Many tutors will say they cannot answer that without seeing some work, and ask the student to re-do the most recent exam paper so the tutor can give some feedback. Based on my experience around 1% of students take tutors up on this offer. Instead, many resit PQs just ask about any syllabus changes, tips for the next sitting, a list of questions to practise … and then fail again. • They ignore available resources. I am repeatedly staggered by the number of students who either do not know that examiner articles, examiner’s reports, etc, are available on the accaglobal website (or the articles and tips in PQ of course!). And many of those who do know about them expect tutors to print the resources out for them rather than go do the legwork themselves.

• Exam day panic. The key to passing is what you think and do in the final half an hour before the exam and the first 20 minutes of the exam once it starts. Think through the approach, and write it down next to each requirement at the start of the exam. Five tips on how to get a pass 1. Practice questions, to exam time, and ask tutors to mark them and provide feedback. Do not let a fail get you down – it is the feedback that is important. 2. Read the five most recent examiner articles for your paper, and the last three examiner’s reports (preferably with the exam paper in front of you). Make notes as you read. 3. If you are attending a class, ask questions. Do not just sit there thinking you can look at it later, because you probably won’t. 4. Stand in front of a mirror and explain a theory or concept to yourself – better still to a friend. One thing tutoring has taught me is that you do not know things anywhere near as well as you think you do until you try to teach someone else. 5. Have a plan for each question type that comes up, and when the exam starts write this plan quickly next to the question requirement (and before panic sets in later in the exam). PQ • Paul Merison is London Director of ACCA at LSBF



PQ Awards 2018


We begin our search for nominations for the PQ magazine Awards 2018 – get your entry in nice and early!


he countdown has begun for the 15th PQ magazine awards night. We have commissioned a whole new set of PQ trophies, so all we need now is your nominations. The PQ Awards really are the only place to be! Just take a look at the list of our sponsors. Anyone who is anyone in accountancy wants to sponsor our awards. Our five independent judges will also ensure that those who deserve it get ‘shortlisted’. And, remember, getting shortlisted gets you an invite to the awards night, to be held in February at the fabulous, legendary Café de Paris. Be our PQ of the Year, like Tim Mpofu, and you could become a cover star. We promise your mum will love it! The joint was rocking earlier this year to the disco beat, with compère Nathan Caton bringing the house down with his stand-up comedy – and when he tried to pronounce ‘ACCA’. There are 18 coveted trophies up for grabs, so you have plenty of chances to be at the awards party. To get started, all you need to do is to download

our application form from our website. Go to and click on the ‘awards’ bar at the top of the page. Alternatively, just email us your nomination directly, making clear what award category you are entering. It is important we have all your details, too, because we may need to invite you to the awards! So what do we need from you? Well, all you have to do is write 250 words and provide any supporting evidence separately on why your nominee should be shortlisted for one of our awards. And don’t be shy, we really do encourage you to nominate yourself. All too often we come across people doing great work that just isn’t recognised – we want to change that. You can also show someone how they have made a difference to your life by nominating them. The judges are after quality, not quantity. Our awards aren’t about the number of entries per nomination. Those with most entries aren’t guaranteed to win – just one nomination form goes into the judging room. Once you have everything ready send it to or post to: The Editor, PQ magazine, Unit 3a, Kingsfisher Heights, 2 Bramwell Way, Royal Docks, London E16 2GQ. The deadline for nominations is Friday 1 December 2017. PQ


CATEGORIES • • • • • • •




• • • • • • • • • •



No awards ceremony is possible without the sponsors. And we have only the best...


PQ Magazine October 2017

Awards 2018 PQ


2017 – HARRY PAMPIGLIONE This month’s cover star is our current NQ of the Year. Pampiglione works at PwC and is a man who believes in putting things back. Not only has he been a successful London student society chair, he also led a team of young professionals developing a digital marketing strategy for global human rights charity Reprieve. He also helped trace the proceeds from a diamond mining operation, despite secretive agreements between government and corporations. He really is fighting the fight to make accountants interesting.

2016 – SHARON HARRIS If you had told a 16-year-old Sharon Harris (right) that at the age of 52 she would be a chartered accountant with an honours degree she would have asked you what you were on! Well, she is an AAT and CIMA-qualified, with a first-class honours degree from Manchester Met University. The girl’s done good! When she won our award in 2016 she was working for Agchem Project Consulting. It took her three-and-a-half years to get CIMA-qualified, and she said this was despite her being a guinea pig for the new exam format.

2015 – KYLE TYRRELL Kyle Tyrrell began studying ACCA part-time at LSBF in 2011, passing all the exams first time. He became fully qualified in 2013 and has since received numerous promotions at AXA Insurance. When we meet him he was working in the corporate partnership team as a business manager, responsible for £35m GWP annually. He even made time to set up his own catering company, called MyLK (which stands for My Little Kitchen). After an initial investment of £500 the business made £50,000 after only one year.

Stuck on, or worried about CIMA P1, P2 or P3: ŽŶ t be! Study with HTFT!

Join us for CIMA P1, P2 or P3 in Oct/Nov and get:  HTFT Partnership study notes  complete syllabus in bite-sized downloadable recordings for you to watch at your own pace  ϲƐĐŚĞĚƵůĞĚ ůŝǀĞŽŶůŝŶĞ ŵĂƐƚĞƌĐůĂƐƐĞƐʹ where we focus on application of knowledge and exam questions and techniques  6 sets of online homework questions  3 online mock exams ʹ simulating the real exam  HTFT dedicated tutor HTFT Partnership is a CIMA Premium Learning Partner, and is PQ Online College of the Year 2017

Online College of the Year 2017

Why would you go anywhere else?

For more information email or call 0121 745 8842 PQ Magazine October 2017


PQ contract management

How to spend wisely Mohamed Hans explains how an organisation can achieve value for money through effective contract management


key objective of public sector entities in the UK is to deliver efficient procurement and ensure their objectives are achieved within the financial constraints. With the current budgetary pressures, organisations are considering a wide variety of options to deliver services, but for many years, contracts were outsourced to third party providers. Supporters of outsourcing claim that it is a proven method of driving efficiencies in the public services. Others, however, question whether it is worthwhile, taking into account a litany of recent public sector contract failures. For example, G4S Olympic security contract, NHS contracts for patient services, which collapsed after only eight months because it proved financially unsustainable, as well as the Virgin Coast Main Line rail franchise, which had to be scrapped after major technical errors that resulted in multi-million-pound damages settlement to the aggrieved bidders. Value for money (the optimal use of resources to achieve the intended outcomes) of government spending is one of the tenets of good public procurement. The three E’s readily come to mind: • Economy: minimising the cost of resources used or required (inputs) – spending less. • Efficiency: the relationship between the output from goods or services and the resources to produce them – spending well. • Effectiveness: the relationship between the intended and actual results of public spending (outcomes) – spending wisely. To be successful in delivering value for money, public sector entities must raise their game. Contract management, embedded with value for money behaviours and action, requires significant investment in the right quality staff and internal procedures that prevent the same mistakes happening again and again and to leverage opportunities to improve in service delivery. Procurement and contract management professionals create value by eliminating or reducing inefficiencies and waste during the operational life of the contracts. The value captured during the pre-award phase can be realised throughout the life-cycle by ensuring that the contract is effectively managed. Contract management is also about resolving or easing tensions in contracts to build a relationship with the provider based on mutual understanding, trust, open communications and benefits to both customer and provider – a win/win relationship. To achieve value for money in contract 26

management five steps should be considered. They are: 1. Active, not passive, contract management There needs to be an acknowledgement that organisations must invest in ‘active contract management’ that will set the path for a good contracts and better services. This requires internal teams to fully understand service issues and get to know their service providers, leading to more constructive and workable relationships. 2. Preparation is critical For effective contract management, it is important that this stage is considered at the initial identification of need (when developing the business case) and the contract caters for all foreseeable eventualities. The contract should include relevant terms and conditions as well as key performance standards, remedies, monitoring procedures and notice provisions. Contract terms should also be transparent and effectively negotiated. A growing development in a number of public bodies is the establishment of commercial teams that are taking control of all external supplier relationships. 3. Contract champion Organisations should consider appointing a contract champion who has a strategic role in keeping a commercial eye on all contracts and producing regular reports with key performance issues and ongoing risks. It is crucial to ensure that the right people, with the relevant commercial, interpersonal and management skills are involved in contract management. This also extends to ensuring you get the right external advisers as we seem to have too many contracts which wipe out a rainforest due to the number of pages but is not understood and ends up retaining the contractual risks with the public body, instead of actually transferring this to the provider. 4. Driving performance Generally, organisations make limited use of service credits and other financial incentives to

drive supplier performance. Although many contracts include relevant terms, service credit deductions for under-performance are often not invoked by contract managers. The main reason cited is that this could damage the customer’s relationship with the supplier, or would not improve supplier performance. A simple way to overcome this reluctance is to provide for automatic deductions – with the possibility of earn-back over a period of time. This would however be subject to a comprehensive dispute resolution mechanism in the contract which is understood by both parties and is also workable. The problem with too many contracts is that this is made too complex and it becomes impractical or impossible to put into practice. Like in the recent UKTI example, too often public bodies are over-charged on their contract as there is no ‘intelligent client’ at the centre to scrutinise what the service provider is invoicing. Another example is the reported overcharge of up to £19m involving Birmingham City Council and its repairs and maintenance provider. 5. Supplier relationship management Developing a proactive approach to meet with your suppliers and not wait until something goes wrong is also key. Time and resources need to be invested into developing a relationship with the supplier that results in better service delivery. While it is important to develop and maintain effective relationships, public sector organisations must not forget that they need to maintain commercial confidentiality to ensure taxpayer’s money is wisely spent. Due to a series of high-profile governance failures, public scrutiny is running high. And so, ensuring that contracts are achieving outcomes must be of utmost importance to procurement and contract management professionals. By following these five steps, those working in the sector will be significantly more empowered to boost value for money and ensure that outsourcing benefits the communities that public sector organisations serve. PQ • Mohamed Hans, CIPFA Procurement Advisor PQ Magazine October 2017

ACCA case study PQ

Change is afoot

James Taylor explains how the new case study may affect your planning


CCA is introducing an innovative Strategic Business Leader case study in 2018, whose syllabus aim is “to demonstrate organisational leadership and senior consultancy or advisory capabilities and relevant professional skills, through the context of an integrated case study”. Core competences have been taken from existing P1 and P3 and made more practical in this new case study, which will be examined for the first time in September 2018. The ACCA Strategic Business Leader exam is based on an integrated case study containing a number of assignments/tasks; will consist of one

compulsory section with all questions related to one case study; will have 100 marks in total (80 for technical syllabus knowledge, and with up to 20 professional marks); and is four hours in duration including reading, planning and reflection time. The case study will be issued on the day of the exam, so there is no material to pre-prepare. The case study will contain mixed information, such as: • Annual reports. • Media sources. • Spreadsheets. • Pictures and diagrams. • Survey results. • Interview transcripts. • Memos, emails and presentations. In the exam you will use the case study materials to perform tasks, which reflect the practical tasks you’ll encounter in the workplace. They might include: • Analysing and interpreting data. • Identifying and resolving problems. • Drafting written business communications. • Creating presentations. ACCA, in the new syllabus, explains that “in broad terms it is recommended that students should spend 50% more learning time in preparation for this examination than normally

Practice every day keeps resits away Meet Daniel Powley (below), the ACCA who achieved the joint highest grade worldwide for his P2 Corporate Reporting paper Why accountancy and why ACCA? I had two weeks of work experience in an accountancy firm after finishing my GCSEs. I thoroughly enjoyed the day-to-day variety and the opportunity to work individually while being part of a team. The ACCA qualification was the preferred one by my employer, but I also know other people who have gone through the qualification, so I knew I would be able to benefit from their experience. How did you celebrate passing all your ACCA exams? I had a holiday to America planned starting at the end of the PQ Magazine October 2017

week of results being released, and knowing I wouldn’t be returning to more exams made it all the sweeter!

You were a prizewinner at P2 and P6. Did you know you had done well? I felt I had probably done enough to pass P2 and I was happy with how P6 had gone, but I did not realise quite how well they went until I got my results. What advice can you give P6 students struggling to pass the advanced taxation paper? For P6, as with many of the professional level exams, time management is one of the key issues. It’s easy to get bogged down with the compulsory question at the beginning as it’s often the hardest question on the paper. Reading through the whole paper first and tackling your best question first should settle the nerves and get you off to a good start. Any other tips for passing the ACCA exams? Try to study a little bit every day. Working full time can make this difficult, but just 45 minutes to an

required for other exams at this level”. So what does this mean for students who have sat either P1 or P3, or are coming to the end of their F papers considering we have now have exam windows (December ’17, March ’18 and June ’18) until P1 and P3 are no longer examinable and the Strategic Business Leader case study exam is launched? The Strategic Business Leader exam will replace the P1 and P3 exams, and while the core syllabus is drawn from these papers, it will be refreshed and restructured so that it more closely reflects the demands of the workplace. The new exam will focus more heavily on the strategic application of knowledge and professional behaviour in real-life business context. You will have to sit the new exam if you haven’t passed both P1 and P3 before September 2018. If you’ve only passed one, then you will have to sit the Strategic Business Leader exam and you’ll need to study the new syllabus. This article is not about making a recommendation for you, it is aiming to lay out the facts so you can make an informed decision on how to sequence your ACCA papers. PQ • James Taylor is a director at HTFT Partnership hour each evening really adds up over the course of a couple of months. Weekends are important, too. Continue to do things you enjoy as well as studying hard, but when you have passed those exams you will have all the time you want for other things. Tell us a bit more about your role at Perrys Chartered Accountants in Tunbridge Wells. I am the assistant manager. My role varies from the preparation of company accounts and personal tax returns to requesting clients’ records and assisting junior members of staff to learn the ropes. Occasionally I get involved in audits, including going out on site, and even bookkeeping assignments. Where do you see yourself in five years’ time? I still see myself at Perrys, perhaps in a slightly more senior role. I really enjoy my job and the people I work with so I don’t want too much to change. If there was one tax you could change what would it be and why? National Insurance. I believe the tax system would be simplified by combining NI with income tax. What’s the best piece of advice you have ever had? ‘Mathematics is not a spectator sport.’ One of my university lecturers said this to impress upon us the importance of getting stuck in and practising questions to properly learn the subject. I think is true of accountancy, too. PQ 27

PQ CIMA spotlight

‘What you think you become. What you feel you attract. What you imagine, you create’


s a qualified yoga teacher, I often look to the Buddha for inspiration. For me, the quote above sums up the way we should think about our lives and careers – whether as a student of fine art or of accounting! Taking responsibility for our lives and thinking positively are two of the most powerful things we can do to achieve success and do good for others in the process. Let’s think of this in terms of exam taking and being a student of accountancy. When you registered with CIMA (or another accounting body), either consciously or unconsciously, you were thinking of what you would become in the future – a qualified accountant – and all that this means: a secure job, decent pay, prospects, interesting work, respect and recognition from family, friends, colleagues and society. You probably weren’t thinking about latenight studying, juggling your work-life balance, failing exams or getting stuck at a certain level wondering whether you’d ever progress beyond it.

CIMA’s Jackie Durham explains why it pays to think positively about your accountancy studies In other words, there was probably a gap between aspiration and reality. That really doesn’t matter so much; see it as an opportunity you need to practise acceptance (another powerful Buddhist technique). Accept that the reality is probably a lot tougher than you thought, while also acknowledging that it’s the same for trainees in all professional disciplines. In fact, it’s this toughness and the character building that goes into overcoming it that make professional accountants so sought after in the job market. What matters is keeping your eye on the long-term goals and what motivated you in the first place. It’s very easy to get bogged down in negative thinking, to feel that you’ll never get past a particular exam or be confident enough to enter your first case study. And that can lead to inertia

or basically not doing a lot. Sometimes just the thought of failure can lead to inertia. Passing and progressing are so important that we put off even entering the exams until we feel 100% ready. However, in doing this, we are denying ourselves the opportunity of success, that feeling of achievement we sought in the first place. There’s rarely a perfect time to do anything, but it’s usually better to do something than to do nothing at all. If you don’t try, you have no chance of success… As a qualified accountant you are going to have to make decisions every day so start now and make positive decisions about how and when you study and when you will sit your next exam. Think positive, feel positive, imagine a positive future and you will succeed. Don’t expect it to be easy – nothing that is worth having comes easy. But remember that it’s going to be worth it when you are fully qualified and working in that great job with prospects. Imagine how you will feel and how proud your family and colleagues will feel about you. Let’s finish with another one of my favourite quotes (variously attributed): “Every journey starts with a single step.” Take that first single step now, book your next exam and join the journey to a bright future. PQ

THE ACCOUNTING PROFESSION IS CHANGING FASTER THAN EVER BEFORE Find out how; Find out why; and find out how you stay relevant Keynotes from the profession’s thought leaders; 30 practical workshops; All the leading software companies under one roof Diamond Sponsors:

Monday 16th - Tuesday 17th October 2017 Queen Elizabeth II Conference Centre

PQ Special two-day SILVER package, including refreshments and buffet lunch only £120.00 PQ Special two-day GOLD package, as above plus Dinner and LUCA Awards, only £169.00

To get your special PQ deal please call 0845 060 2345 now to book your place, quoting ‘PQ’ 28

PQ Magazine October 2017

ICAEW spotlight PQ


hoosing the ACA qualification from ICAEW will help you go places in your career. Our members work at the highest levels in top organisations all around the world, in fact 98 of the world’s 100 global leading brands employ ICAEW chartered accountants. If you are still at university, or studying for the AAT and looking to take your next step, hear how Carol and George’s careers as ICAEW Chartered Accountants has helped them achieve their goals. Carol Handa, Finance Director, Operations, L’Oréal: “I’ve always had a passion for languages and for travel. I felt that with my strong languages background that adding a finance dimension would enable me to become a well-rounded business leader. “The credibility I have both because of my professional qualification, and the perspective I’m able to bring, means my opinion is sought on a wide variety of business issues, not just typical ‘finance’ ones.

A bright future

Two ACAs explain how the ICAEW qualification has help boost their careers “As your career develops, there can be a big strategic, leadership element, which is a real inspiration. “I love to travel and luckily have had many opportunities to visit some amazing countries, with my favourite trips including trekking the Inca Trail in Peru and walking on the Perito Moreno glacier in Argentina.” George Acquah, Marine Finance Manager, RollsRoyce: “It was clear to me when making a decision on my career that the ACA was the premium qualification. With the option to train globally, I knew it would allow me to have a better quality of life and get myself on my feet quicker. “After university, I got a place on the PwC graduate training programme and trained for the ACA there. This option allowed me to stay in the Midlands, which was an important factor for me. I chose chartered accountancy because of the variety it offered; no two days

appeared the same and I knew there would be plenty of interesting challenges. “The best part about my job is the travel. I moved to Rolls-Royce in 2015 and am now a Marine Finance Manager for the business, working with business divisions throughout Europe and globally – so there’s plenty of opportunity to travel. It’s really interesting to meet new people, explore new cultures and see how differently the same functions in a company operate from country to country. The ACA really does open up a world of opportunity!” For more information on how to take your next steps visit and find out how ICAEW Chartered Accountancy is so much more than you’d imagined. PQ • Thanks to the ICAEW for this article


Are you exam ready?

You need PQ-GO! Take our series of free online tests – and get that exam pass PQ Magazine October 2017


PQ ACCA P6 exam

Avoiding the traps Sally Chapman offers some top tips on passing the Advanced Taxation paper

Exam technique is critical Another topic frequently mentioned in the Examining Team’s comments is exam technique. Key points to consider are: Planning This is particularly important in your section A questions. Spend approximately 10 minutes at the start of each of these questions locating the specific requirements and absorbing the key information. You may spend this time annotating the question and making notes in the margin or preparing a mind map/written plan in your answer booklet. You need to practise this before your real exam to see what works best for you, but planning means you will write a more concise answer. When you do spend time planning you then need to make sure you practise getting your points down clearly and quickly or you will run out of time before making your points.


s BPP’s P6 Advanced Taxation subject matter expert I can’t actually sit your exam for you, but I can offer you my top tips for ensuring your success. Strong assumed knowledge Sadly, many students’ assumed F6 knowledge is simply not good enough. Perhaps this is down to you sitting your previous paper a while ago, or even having been exempt, but you cannot expect to be successful if your basics are weak. Take time to nail down your fundamentals. Topics often picked up on as poor include application of basis period rules and administration. Know your P6 material While knowing the basics will get you some of the way, you must expect some of the new technical topics will be examined in detail. If this is in a section A question and you don’t have that knowledge you’ve already lost valuable marks. Don’t underestimate the level of technical detail that they like to ask – try to take the time to learn as much as possible! In recent papers examples have included application of the sufficient ties tests, share options, disposal of UK residential property by a non-resident and EIS/SEIS/VCT rules. Incorporated or unincorporated? You really must understand the difference between an incorporated and unincorporated business. It may sound 30

silly but this is another point that the Examining Team frequently picks up in their comments. If you misinterpret the type of business being asked about you are fundamentally wrong from the start! Are you being asked about a sole trader (and thus income tax, NIC, capital gains tax and VAT) or is the business incorporated (corporation tax, NIC and VAT)? The word business does not tell you which you have. Similarly, don’t confuse trade loss reliefs for sole traders versus companys. Follow tips given within the questions Take careful note of the words and advice given in the question. The Examining Team have stated that they take great care to present the information in the question as they do and are not trying to trick you! The question often suggests a process you might want to follow – if the Examiner has taken the time to write this it will be useful advice, so follow it! Does the question specifically request calculations or are you told calculations are not required? Apply to the scenario In addition to having the technical knowledge required at this level, you must be able to apply your knowledge to the scenario given in the question. In fact, the Examining Team do not like it when students simply ‘brain dump’ knowledge in their answers. Rather than listing your knowledge apply it directly to the facts in the question.

Timing You must keep to time across the paper – 1.95 minutes per mark. Do not let yourself get bogged down in any subrequirement. If you need to state an assumption and move on! Answer each part of each question You must make sure you keep moving through the paper and write something for each sub-requirement. Answer the question asked Always read the requirements twice. Once before you read all the information so that you know what’s been asked before you start to plan, and then once more before you write up your answer. There will be no marks available in a marking guide for something technically correct if you’re not answering the question asked. Clear, concise writing style If you have the knowledge it’s amazing how much you need to get down in a short space of time! So practise using headings and sub-headings to break your answer down into sub-requirements. Also ensure you give adequate explanations of calculations and that you make each point clearly. Try reading some of your answers back the next day. Often when you ‘debrief’ a question you think you made certain points, but when you read back your answer in the cold light of day you may not have explained yourself clearly enough. PQ • Sally Chapman is a tutor and subject manager expert for ACCA P6 at BPP Professional Education PQ Magazine October 2017

presentations PQ good story will always grab the attention of your audience. And a human angle will make it even more interesting. One of Steve Jobs’ most famous speeches is his Stanford Commencement Address from 2005, which has been watched more than 26 million times on YouTube. In this speech he tells three stories about crucial moments in his life – and it is these personal stories that have made his speech so compelling. Adding a human angle and relatable context, even in a financial presentation, will help you communicate information effectively.

How to give great financial


Peter Simons has some advice on an activity that scares many of you witless – giving a presentation to your firm’s top brass


ou’ve analysed the data. You’ve derived the insights and understood the implications to the business. Job done? If only business was that simple. Understanding the numbers and their meaning is only one piece of the puzzle. Effectively communicating the data and telling the story behind the numbers is the other piece. To do this you might need to give a presentation – and this is where many start to worry. To help accountants ease their fears the AICPA partnered with communications experts Peter A. Margaritis and Jennifer Elder to create a new CGMA guide: ‘Six rules to delivering a powerful financial presentation’. This brief helps finance professionals prepare and deliver powerful presentations. Here are the six rules to guide you on your next financial presentation. 1. It’s all about the audience Before you start preparing your presentation think about your audience. Accounting and finance types mainly use the left part of their brain, the side responsible for language, logic and analytical thinking. Sales and marketing people make more use of the right part of the brain, responsible for intuition and creativity. For them less is more, and many try to avoid getting into too much detail and information, especially when it is about numbers. So the big question is, how can you deliver the financial PQ Magazine October 2017

information that is needed without confusing your listeners? The answer is, you need to tell them what they want to hear first and then continue with what they need to know. This way you’ll have their attention right from the start. 2. Let go of the need for perfection Nobody likes making mistakes. That’s one of the reasons why so many people hate giving presentations – when you are thinking on your feet, mistakes simply will happen. If you make a mistake, the most important thing to remember is: do not panic. Panicking will cause you to forget to breathe, meaning that your brain won’t get enough oxygen, and your performance will not be as cogent as it could be. If you make a mistake, pause to regain your composure and continue. It’s natural to do this while speaking so your audience won’t notice that you are trying to calm down. A good training tool is to take a video of yourself while practising and watch it. This will help you learn from your mistakes and give you more confidence. 3. Grab the audience’s attention While much communication tends to be short and quick these days, telling a

4. Tell the story behind the numbers When explaining highly technical accounting details do it in a way that doesn’t use slides packed with raw data. It’s important to translate the data you have into information and knowledge about what actions your audience needs to take. The numbers and figures alone won’t be useful to your colleagues. It’s not just about how much your revenue increased, for example, it’s about why it increased and who played an important role in this. That’s your story behind the numbers. 5. Use pictures to enhance the data Using visuals will help with your storytelling as it gives context to the information and illustrates the point you are trying to make. If you pack your slides with too much data your audience will focus on reading it instead of on you. When you present information like sales, gross profit or net income you can also illustrate your point by putting data into charts instead of using only numbers. 6. Simplify Avoid jargon. If you are speaking to people from elsewhere in the business, most of your audience will probably not understand the technical language of accountancy. So you need to make your financial presentation as simple as possible and understandable to everyone. Take a tip from Warren Buffett: pretend you are addressing a member of your family. So to summarise, giving a convincing financial presentation is about grabbing the attention of the audience by telling the story behind the numbers; using pictures or graphics; and using language everybody understands. By following the above six rules and practising, practising, practising, everyone can become a better financial storyteller. To download ‘Six rules to delivering a powerful financial presentation’ go to PQ • Peter Simons is Associate Director of Research and Development – Management Accounting, Association of International Certified Professional Accountants 31

PQ income tax computation

A place for everything In our series taking you back to basics, top tutor Caron Betts looks at the Income Tax Computation


hether it was Benjamin Franklin or Mrs Beeton who coined the phrase “a place for everything and everything in its place”, it is certainly an appropriate piece of advice to follow when preparing an income tax computation. The F6 examiner regularly asks students to put together an income tax computation in Section C of the exam, so it’s important to remember the format and order of the various elements. Let’s start with this basic principle for calculating income tax: Total income – Personal allowance = Taxable income Of course, the computation is a little more complicated than that, but at least we know that the final item before arriving at taxable income must always be the personal allowance (PA). Let’s think about ‘income’ a little more. An individual can have many different sources of income, and we want to present a neat and tidy computation, so let’s split our income into income that is as a direct result of work, and then everything else. We can call that ‘earned’ and ‘unearned’ income, and it would probably be easier to present our computation in a columnar format, which means we now have: Earned income Unearned income Total income Less PA Taxable income

X X X (X) X

Earned income can come from a number of sources and so that heading might need to be split into: • Trading: This will be the profits from either self-employment or a share of a partnership. Be prepared to do some calculations such as adjusting the accounting profits or calculating the capital allowances. The computation should show the final figure and be cross-referenced to the relevant working. • Employment: The employee in the scenario is likely to have a salary, some expenses and some benefits in kind. List each of the items on the face of the computation under the employment heading, but cross reference to supporting workings where necessary. Remember to include all related employment income and expenses under this category. • Pensions: These will be pensions received by the individual. Watch out as the question may also have payments under an occupational scheme (these are deducted from the salary), or payments to a personal pension scheme (these affect the tax bands and the personal allowance). • Rents from furnished holiday lettings: All other rental income is treated as unearned income but considering the more regular activity in managing holiday lets it does make sense to treat it as earned income. Our computation now looks like this: Earned income Trading (W) Employment (W) Pensions Rents from furnished holiday lets Unearned income Total income Less PA Taxable income

X X X X X X X (X) X

We can now turn our attention to unearned income and there are three categories here: • Dividends: The full amount of dividend income is included here even though the first £5,000 falls within the nil rate band. The computation must include ‘total’ income and therefore everything goes in at this stage. 32

• Savings: These will come from banks, building societies, corporate loan stocks and government bonds. • Rent: All rent (other than furnished holiday lettings) should appear here. You may need to do a simple income and expenditure figure as a working to arrive at the figure to include. Putting our expanded unearned income into our computation we have: Earned income Trading (W) Employment (W) Pensions Rents from furnished holiday lets Unearned income Dividends Savings Property


Total income Less PA Taxable income

X X (X) X

There is another deduction that may need to be made in calculating taxable income and that is qualifying loan interest. Unlike other areas on the computation where we matched expenses to the relevant sources of income, interest on qualifying loans is simply treated as a deduction from total income and the net income is called just that; net income. We therefore arrive at our final version of the income tax computation: Earned income Trading (W) Employment (W) Pensions Rents from furnished holiday lets Unearned income Dividends Savings Property Total income Less qualifying loan interest Net income Less PA Taxable income


X X (X) X (X) X

Remember to identify with zero’s any non-adjusting items (including the PA). There will be marks available for demonstrating that an item was not taxable/not adjustable and you can only score those if you have make reference to them in your answer. You now have your taxable income and can use the rates and allowances provided in the exam to calculate the income tax payable/repayable. PQ • Caron Betts is an ACCA F6 tutor for AVADO PQ Magazine October 2017

GAIN FREE WORK PLACEMENTS WITH ALL OUR COURSES ! We offer Practical training courses in: - Sage Payroll

- Sage 50 Accounts - Management Accounts - Value Added Tax (VAT) - Excel Spreadsheet and others

Daytime/Evening Courses:

AAT Level 2, 3 & 4

September 18th START

Distance Learning Available

**Payment Plan **


For more information: Call: 020 7252 9331 Email: Address: Carlton Cottages, 12 New Cross Road London SE14 5BE

of Excellence @Training_Place 07496141960

where quality trainings & practical work placements take place

The highest level tax qualification in the UK

Find out more at

Prepare your students for the Case Study Functionality of ACCA, CIMA, ICAEW Individually timed from rest of paper Exhibit popups and highlighting Auto marking and customised feedback/study advice for most question types Your students will be more familiar with functions, timing, and layout ready for real exam

Example spreadsheet question Draggable divider to expand/hide question stem

No installation or download required

Excel functionality (SUM/IF/AVERAGE etc.)

Available worldwide

Visit or call 0207 997 6755 PQ magazine About you Title...................................................... First name............................................ Surname .............................................. Company name .................................. ............................................................ Department.......................................... Full postal address




The easiest way to get your free monthly copy is to go online at, or you can fill in the form below and send it to: PQ Magazine, 4th Floor, Central2 House, 142Way, Central Street, London, EC1V PQ, Unit 3a, Kingfisher Heights, Bramwell Royal Docks, London E168AR 2GQ Study please tick a box in 1A or 1B 1A Please indicate accountancy body you belong to and tick the box of the next set of exams you are hoping to sit ACCA



▫ Certificate

▫ F1-3


▫ Certificate

▫ Diploma

▫ Strategic



▫ Professional

▫ Advanced


▫ TC







▫ Level 2

▫ Level 3

▫ Operations

▫ F4-F9 ▫ Management

▫ Level 4

1B Studying for an accountancy degree/MBA/MSc Do you work in accountancy and finance

▫ P Papers ▫ Strategic

▫ Year 1

▫ Yes

▫ Year 2

▫ T4

▫ Member ▫ Year 3

▫ No

If yes, what is your job title? ..........................................................................................................


* How do you want to receive your PQ magazine?


Please tick your preferred mode of delivery for your free monthly magazine.

Postcode ............................................ Phone .................................................. * Email ................................................ ............................................................

▫ Online (please supply email address)

Sign below

▫ By post (UK only)

to receive your monthly

PQ magazine totally


Sign here ............................................................................Date........................................................... ▫ Please tick here if you do not wish to receive direct marketing promotions from other companies.

PQ magazine reserves the right to refuse a free copy of the magazine if the applicant does not comply with the terms and conditions of circulation.We will use your details to send you a copy of the magazine and any further information we feel would be of use.

careers PQ

social media ROUND-UP

It was recently #Hashtag10 – yes, the hashtag was marking its 10th birthday on Twitter! Our tweets @pqmagazine got lots of retweets this month. One you liked was: “Can it be right? Twothirds of university vice-chancellors sit on the committee that decides their pay, according to an investigation!” Edward Zapita said: “Pathetic…P1 classes needed for all of them.” Our tweet about Barclays becoming the latest firm to place trackers (OccupEye) under the desks of staff to monitor the amount of time they spend at work got a lot of response, too. George Allnert thought it “sounded rather Orwellian” and Harriet said it will help inspire Black Mirror season 4! Johnathan Baker reminded us: “they claim it will monitor the effectiveness of hotdesking, rather to monitor specific staff attendance. Last I saw anyway.” Meanwhile, on Facebook PQ magazine called on ACCA PQs to be aware of the major changes happening to the ethics module. We wanted to ensure you make an informed decision. Vikesh Patel had just completed the module and admitted some elements were difficult, but there is no pass or fail, and he would definitely recommend taking the module before sitting P1. Another ACCA who was on F5 wanted to do the ethics module now: “I’d rather do a free one than have to pay!” Seb Zelazko was just glad he had done his not long ago! “Thank God ha!” Thanks for that Seb. Remember, we have started an ‘ACCA Study Zone’ Group on LinkedIn. We will be putting September exam feedback on there, along with tweeting it out and putting it on the website, as we do after every exam. CIMA’s LinkedIn group now has over 56,000 members and we went online to tell them about the new-look FRC website, which was launched on 30 August. But you read it first if you read our post! PQ Magazine October 2017

Life at EQ Accounts LLP Michael Scott, 30, is a senior accountant working Glenrothes. He has been at the firm for six years, and is one of the first students to study with ICAS without a degree, taking the qualification over five years. He was nominated for PQ of the Year 2017 What time does your alarm go off on a work day? 6:30am. I’ve a one-hour drive to the office. What’s the first thing you do when you get to your desk? Switch on the PC then make a strong black coffee. What’s on your desk? Mini USB fan, picture of my nephews and a small Batman figurine. What’s the best thing about where you work? My two ‘work wives’, Lisa and Fiona. We have a good laugh. Where’s your favourite place to go for lunch? Nisa, a small sandwich shop. They do the best chicken chipotle baguettes. What (or who) can you see when you sit at your desk? My old primary school, it’s quite nostalgic as nothing has changed. I feel old. Which websites are your

favourites and why? HCPT, a children’s charity. I am a deputy leader for the local area and the intranet on the site is full of resources for managing my team. Which websites do you use for work? Beta Companies House – so much information!; HMRC for guidance; and FRC, for changes to reporting standards. How many hours a week do you spend in meetings? Three to six; I’m part of a Fife networking group with local business and part of EQ’s technology specialism group. What time do you leave the office? Around 6:15pm. How do you relax? I play sevena-side on Fridays; enjoy an active weekend life working on the farm where I live, intermixed with the charity work with the children. Although it is difficult it’s

incredibly rewarding. What’s your favourite tipple? Jack Daniels and ginger beer. How often do you take work home with you? Too often! I once got into trouble as I was logged onto the work’s server at home at 2am and was booted off when it reset! What is your favourite TV show? I love the US Office – I share the same name as the lead character. Summer or winter? Winter. I am always far too warm! Pub or club? Pub – what’s better than a local ale, burger and chat with friends. If you had a time machine, where would you go? Twenty to 30 years ahead, to see how the industry is going to advance with technology; what robots I am going to have to fight for my job.

Time to move your desk? If you want to do better at work you need to sit next to the office swot! Economists from Harvard Business School found that being in close proximity to good workers can improve performance. That means a clever seating plan can boost a company’s productivity by 15%. But while star performers will help those around them to shine, the reverse is also true. A ‘toxic’ worker will drag down all their neighbours. Harvard ventures

that it is best to sack the bad apples before the rot sets in.

In brief Deloitte keeps growing The latest financial results show that the average pay of a UK equity partner at Deliotte is £865,000. Deloitte recruited more than 3,500 people during the year, including 1,600 school leavers, interns and graduates. This includes 200 school leavers joining the BrightStart Apprenticeship scheme. The plan is to increase this number to 300. The firm also announced job creation programmes in Belfast, Cardiff and Newcastle.

Google for jobs Google has launched Google for Jobs in the US, via the Google App, desktop and mobile web. It is expected to cause waves in the recruitment market in the US as it uses artificial intelligence and Google’s Cloud Jobs API to better understand how jobs are classified. So, when will we get Google for Jobs in the UK? Soon, apparently…

The PQ Book Club: books you should read Fixing Business: Making Profitable Business Work for The Good of All by Digby Jones (Wiley, £18.99) A wily old fox, Digby Jones – or Baron Jones of Birmingham – has been around the block. He has held a vast number of highprofile positions, including Director General of the CBI (2000–06) and Minister of State for Trade and Investment (2007–08). Furthermore, he is chairman of Triumph Motorcycles and holds senior positions with Unipart, Aon Risk Solutions, Babcock International, Thatchers Cider and even Leicester Tigers plc, among many others past and

present. The point is this – he is a man worth listening to. In this book he aims to ‘fix’ the pressing problem he sees in our society – the disconnect between business, the government and wider society. He believes this three-way relationship has broken down to near catastrophic levels, and that it is of fundamental importance to the UK’s future that it is fixed. He puts the onus on business to act in a responsible way; it has, he writes, the opportunity to use its profits to improve health care, education, employment and poverty. Crucially, he sees the importance on inclusivity, arguing that business benefits

from wider social inclusion, both in terms of profits and image. Jones quotes Henry Ford: “A business that makes nothing but money is a poor business.” Jones writes with concision; this book is very easy to read, with the main text broken up by pithy quotes and various ‘call to action’ boxes, where the reader is invited to consider the key issues and analyse how they respond to them. PQ rating 5/5 Great stuff and highly recommended – buy, borrow or steal a copy. 35

Your jobs board I need to find now!

PQ jobs







01252 718777

01932 901900

01753 313033

01737 304050

PQ got a story, funny or serious, you want to share? Email


Accountants love being suited a booted, and two-thirds (67%) think that businesses should not ditch dress codes in the workplace. A massive 73% disagree that these codes are outdated, according to new study from CVLibrary. While 73% of accountant said they ‘enjoy’ following the code, some 83% appreciate that workplace dress codes have changed over the years. Nearly half of those accountants surveyed felt that dressing smart makes them look more professional to clients, with a further 29% stating that it makes them feel more professional, too.

Courtesy of Private Eye…


Spending by Manchester City FC on defence, including latest recruit left-back Benjamin Mendy last month.


Yearly spending on defence by entire countries of Kosovo, Montenegro, FYR Macedonia, Moldova and Timor Leste added together.



CANNABIS CHARGE The finance chief of the Isle of Man’s Manx Telecom, Danyal Bakhski, has been suspended after being charged with unlawful possession of a Class B substance. CEO Gary Lamb, the former chief financial officer, will fulfill Bakhski’s roll in the interim. Bakhski is to stand trial after he was accused of trying to import cannabis with a street value of £196 from Amsterdam. He has pleaded not guilty and has been bailed until 3 October.


Cambridge University mathematics graduate Ken Cheng recently walked off with the best joke prize at the Edinburgh Festival. Here it is: “I’m not a fan of the new pound coin, but then again, I hate all change!” Boom, boom!


Acacia Mining has rejected a demand from the Tanzanian government for unpaid taxes. The gold miner is being asked for the small matter of $190bn, consisting of $40bn in unpaid taxes and a further $150bn for penalties and interest. In early July, Tanzania passed two new mining laws that contain sweeping changes to the legal and regulatory framework of the mining industry. It has also had an export ban on gold and copper concentrate exports in place since March.


Pick and mix


Match CIMA’s senior personnel with their football team (answers next month): Andrew Harding, CIMA CEO Dr Noel Tagoe, VP, Academics – management accounting David Rowsby, VP Europe – management accounting Peter Stewart, VP Progression – management accounting The teams: QPR, Leeds United, Manchester United and Heart of Midlothian


Creative accounting took on a whole different meaning recently after Dominic Dromgoole, the former leader of the Globe Theatre, warned that the increasing influence of accountants in the arts had to be stopped. He said that accountants seem to need to 100% future-proof ventures and this just isn’t possible with the arts. At the Edinburgh International Book Festival Dromgoole went further: “I think we have a problem in that we are overstaffed in governance areas with people from the financial world and a lot of these people are from the world of accountancy.”


The overhaul of stamp duty rates two years ago have made almost no difference to the sale of homes costing more than £1m homes, according to new figures. This is despite the fact that such transactions became more expensive. Figures from HMRC reveal there were 17,700 sales of £1m homes last year, compared with 17,900 in 2014. In December 2014, the government replaced the stamp duty ‘slab’ system with a progressive threshold that reduced costs for those buying a home priced up to £937,500, but prompted a 10% rise in transaction costs for properties valued at more than £1m and a 12% hike for homes above £1.5m. That means a home costing £1.5m incurs a £93,750 stamp duty charge.


We have a pack of six books to give away this month to six lucky readers. Those whose names are pulled out of the hat will be sent one of the following titles: ‘Influence – how to raise your profile, manage your reputation and get noticed’; ‘Tax Guide 2017 – understanding the tax system, completing your tax return and planning how to become more tax efficient’; ‘Ted Talks – the official Ted guide to public speaking’; ‘What They Don’t Teach You At Harvard Business School’; ‘Great Answers to Tough Question at Work’; and ‘Instant Memory Training for Success’. Send us your name and postal address to be entered for our lucky dip. Head up your email ‘Pick and mix’ and send it to

Criminal minds

Our Agatha Christie giveaway earlier this year was so popular we’ve decided to do it again. Inspired by the BBC show Partners in Crime, we are giving one reader the chance to win five Christie novels. In the shops the set would set you back £40. If you would like to enter this great giveaway then just email with ‘Criminal minds’ as your header.

Terms and conditions: One entry per giveaway please. You must send your name and address to be entered for the draw. All giveaway entries must be received by Friday 13 October. The main draw will take place on Monday 16 October 2017.


PQ Magazine October 2017

Whether you are studying towards CIMA, ACCA or ACA, we have a wide variety of exciting roles available for you during and after your studies. As part-qualified salaries continue to rise and benefits increase to an unrivalled level, there has never been a better time to consider your next career move!

Corporate Finance – Big 4

Commercial Analyst – FTSE 50

London £45,000 - £50,000 Looking to leave audit behind? Make the move into a Top 10 firm with an international presence where you will gain exposure to all aspects of corporate finance including due diligence and advisory. You will work with business leaders and assist with both buy/sell side as well as mergers and acquisitions.

London £45,000 – £55,000 A globally respected organisation is hiring a finalist/newly qualified ACA/ACCA/CIMA to work within its commercial team. You will provide detailed analysis to directly improve the profitability of the business. This is a high-profile role where you will be expected to interact and liaise with senior stakeholders daily.

Audit Senior – Top 10

Finance Business Partner – Media

London £40,000 – £45,000 This Top 10 firm is on the lookout for multiple Audit Seniors. You will have the option to specialise or keep a mixture – something you won’t often find in a firm this size. This position offers unparrelled progression and opens the door to endless future opportunities.

London £40,000 - £45,000 A fast-paced, dynamic media business is recruiting a true Business Partner. You will directly influence the growth and future strategy of the business, working closely with the Directors to drive change and influence the decision-making process.

Audit Senior – Top 50

Contact us

London £38,000 - £42,000 This Top 50 client is looking for an ACA/ACCA qualified (or finalist) Audit Senior with experience of leading audits from planning to completion. Benefit from large clients and complex work, with the added bonus of excellent work-life balance, fast progression prospects and a sociable and fun atmosphere!

If you’re looking for your next step in your career, don’t hesitate to contact me for advice and further discussion. Tom Eagle Manager - Accounting & Finance


DD: 0207 269 6349 E:

Pro-Recruitment Group 20 - 23 Greville Street, London, EC1N 8SS.















F6, F9, P3, P7

F5, F8, P6

Don't miss the opportunity to see our tutors in action – they are all highly qualified professionals, with many years of experience in teaching ACCA.


PQ magazine, October 2017  

PQ is a free monthly magazine for student accountants, focusing mainly on the ACCA, CIMA, CIPFA, ICAEW and AAT qualifications. It's packed f...

PQ magazine, October 2017  

PQ is a free monthly magazine for student accountants, focusing mainly on the ACCA, CIMA, CIPFA, ICAEW and AAT qualifications. It's packed f...