42 All for you to … PASS! HKCA

Special Topics List (STL) (2018 DEC) - [Updated on 8 Oct 2018] - Hong Kong Institute of CPAs (5 Oct 2018): The following topics have been designated as special topics. This means that at least 70% of the Final Examination will be based on the topics below. These topics will be integrated so that candidates are exposed to practical issues faced by professional accountants in practice.

Module A: Financial Reporting A4 1. Financial instruments [In Dec 2017 – Jun 2018] (Ref: LO3.11 / MG 10) A5 2. Revenue [In Dec 2014 - Jun 2017] from contracts with customers [In Dec 2017 – Jun 2018] (Ref: LO3.02 / MG 7) A6 3. Share-based payment [In Jun 2016 and Dec 2017 – Jun 2018] (Ref: LO3.05 / MG 8.1) A29 4. Provisions, contingent liabilities and contingent assets [In Dec 2012 & New in Dec 2018]

(Ref: LO3.16 / MG 6) A30 5. Related party disclosures [New in Dec 2018] (Ref: LO3.20 / MG12.1) A18 6. Business Combination [In Jun 2014 – Dec 2015 & Dec 2016 – Dec 2017 & New in Dec

2018] (Ref. LO4.06 / MG 9.2) A24 New Companies Ordinance [In Dec 2016 - Jun 2018] (Ref: LO4.02 / MG 1.1 & 1.7.2) A7 Property, plant and equipment [In Dec 2017 – Jun 2018] (Ref: LO3.08 / MG 2.1) A28 Fair value measurement [New in Jun 2018] (Ref: LO3.25 / MG12.4)

Module B: Corporate Financing B20 1. Strategy formulation [In Dec 2015 – Jun 2017 & New in Dec 2018] (Ref. LO1.01/ MG 1&2) B3 2. Capital structure and cost of capital [In Dec 2014, Jun 2015 & Jun 2016 & in Jun 2017 –

Jun 2018 added “Capital structure”] (Ref: LO6.01 & 6.02 / MG 13 & 14) B12 3. Performance measurement [In Jun 2017 – Jun 2018] (Ref: LO2.01 - 2.04 / MG 5) B1 4. Project appraisal techniques and process [In Dec 2014 - Dec 2015 & Dec 2016 – Jun 2018]

(Ref: LO1.02 / MG 12) B27 5. Due diligence [In Dec 2011 – Jun 2012 & New in Dec 2018] (Ref: LO9.02 / MG 18) B16 6. Stock Exchange regulation and reporting requirements [In Jun 2014 & Jun 2018] (Ref: LO10.4 / MG15) B28 7. Corporate social responsibility and sustainability [New in Dec 2018] (Ref: LO2.05 / MG1)

B5 Raising finance [In Dec 2017 – Jun 2018] (Ref: LO6.04 / MG 9 & 14) B19 Cash management and forecasting [In Dec 2017 – Jun 2018] (Ref: LO4.01 / MG 8) B15 Takeover [In Jun 14 & Jun 2018] (Ref: LO9 / MG 18) Module C: Business Assurance C3 1. Planning and risk assessment [In Jun 2015 – Jun 2018] (Ref: LO2.05 / MG 3, 5 & 6) C4 2. Audit procedures [In Jun 2015 – Jun 2018] (Ref: LO2.09 / MG 3.3.3, 4 to 11) C12 3. Completion procedures [In Jun 2017 – Jun 2018] (Ref: LO2.12 / MG 3.5, 5.10-5.11, 9.5-9.7,

12.1 &14) C11 4. Audit of group financial statements [In Dec 2016 and Jun 2018] (Ref: LO2.09.11 / MG11) C16 5. Computerised business system [In Jun 2015 - Jun 2018] (Ref: LO4 / MG 17) C10 6. Corporate governance [In Dec 2017 – Jun 2018] (Ref: LO3 / MG 16)

Module D: Taxation D8 1. Ascertainment of profits tax liability [New in Dec 2018] (Ref: LO2.28 / MG p.7, 17, 24, 29) D15 2. Scope of salaries tax charge [In Dec 2014 - Jun 2018] (Ref: LO2.04 / MG p.40-42, 47-52, 56) D19 3. Scope of profits tax charge [In Dec 2015 - Jun 2018] (Ref: LO2.14 / MG p.5-14) D5 4. Source of business profits [In Dec 2016 - Jun 2018] (Ref: LO2.16 / MG p.5-6, 25-27 & 29-39) D6 5. General deductions and specific deductions of businesses [In Dec 2014 - Jun 2018]

(Ref: LO2.18 / MG p. 15-24, 28-29, 38) D17 6. Distinction between capital and revenue items [New in Dec 2018] (Ref: LO2.19 / MG p.9) D9 Stamp duty [In Jun 2017 – Jun 2018] (Ref: LO2.33 - 2.42 / MG p.72-83) D21 Hong Kong tax planning [In Jun 2017 - Jun 2018] (Ref: LO2.48 / MG p.5 & LP 9) D18 Double taxation arrangement [In Jun 2016 - Jun 2018] (Ref: LO2.47 / MG p.30-32, 36)

FE

MA

– D

EC

18

ST

L

FE

MB

– D

EC

18

ST

L

FE

MD

– D

EC

18

ST

L

FE

MC

– D

EC

18

ST

L

QP MA – Financial Reporting

All for you to PASS! Page 1

Hot Topics for QP Module A - Dec 2018 Exam

What study materials to focus now:

During the last few weeks before the real exam, you are advised to review the core topics as discussed during the revision course. Review the mind maps and key notes in Master Guide to refresh your memory

What has been examined last time:

Review the topics that have been examined recently as highlighted in the given Past Paper Analysis

and make a reasonable guess. The Jun 2018 examined topics are listed as follows:

Consolidated statement of cash flows (19 marks)

Ethics (4 marks)

HKAS 2 Inventories + HKAS 40 Investment properties + HKAS 16 PP&E (12 marks)

HKAS 7 Cash flow statements (11 marks)

HKAS 12 Income taxes (7 marks)

HKAS 37 Provisions, Contingent Liabilities and Contingent Assets (11 marks)

HKFRS 8 Operating segments (10 marks)

HKFRS 9 Financial instruments + HKFRS 3 (Revised) Business Combinations (10 marks)

HKFRS 16 Leases + HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

(16 marks)

Revision Q&A:

Practice again the typical exam questions as highlighted and discussed in class.

What are the key topics:

Note that it is not questions spotting and you are advised to cover the whole syllabus. The hot topics

are covered by the progress test and mock exams as follows –

Progress Test

Consolidated statement of financial position – Goodwill, Disposal of subsidiaries, Defined

benefit pension scheme, Shared option scheme, Joint operation

Code of Ethics

HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

HKAS 21 The Effects of Changes on Foreign Exchange Rates

HKAS 24 Related Party Disclosures

HKAS 38 Intangible assets + HKAS 36 Impairment of assets

HKFRS 5 Non-current Assets Held for Sale and Discontinued Operations

HKFRS 9 Financial Instruments – debt factoring agreements

HKFRS 10 Consolidated financial statements

HKFRS 13 Fair Value Measurement

HKFRS 15 Revenue from contracts with customers

QP MA Financial Reporting

Page 2 All for you to PASS!

Mock Exam

Consolidated statement of cash flows – Indirect method, Retirement benefits, borrowing costs,

Goodwill impairment testing, Investment in associates

HKAS 2 Inventory

HKAS 23 Borrowing Costs

HKAS 24 Related Party Disclosures

HKAS 37 Provisions, Contingent Liabilities and Contingent Assets

HKAS 38 Intangible Assets - Recognition of website costs

HKFRS 13 Fair Value Measurement

HKFRS 15 Revenue from contracts with customers

Final Mock Exam

Consolidated statement of profit or loss and other comprehensive income – Goodwill,

Acquisition of subsidiaries, Financial instruments, Employees benefits – pension, Finance

lease

Code of Ethics

HKAS 12 Income Taxes

HKAS 16 Property, Plant and Equipment & HKAS 40 Investment Property

HKAS 36 Impairment of Assets

HKAS 37 Provisions, Contingent Liabilities and Contingent Assets

HKFRS 3 (Revised) Business Combinations

HKFRS 8 Operating Segments

HKFRS 9 Financial Instruments

Don't forget the common but useful exam skills:

Apart from technically right, a key element to exam success is getting the exam techniques right.

Remember to pay attention to instructions, manage your time properly, present answers well, make

answers relevant, and gain easy professional marks as well. Making sure these exam skills are

second nature and remember the magic number i.e. 1 mark = 1.8 minutes.

When there is a will, there is a way to pass! Good luck to you all!

Best wishes,

MA Lecturer, HKCA

"All for You to . . . Pass”

12 Dec 2018

QP MB – Corporate Financing

All for you to PASS! Page 1

Hot Topics for QP Module B - Dec 2018 Exam

What to do now? During the exam, time is a very important factor to make you pass or fail, you will have no time to go through the Master Guide, Q&A or your prepared materials, here are some tips for your better preparation before entering the exam hall. Read and tag all the materials you have studied, make yourself a systematic critical file Revisit the mindmap and Q&A to get yourself familiar with your own materials Practice a full diet question and see if you can finish it within 3 hours The earlier you start practicing the Q&A, the higher chance you will pass the exam. What have been examined last time: Review the topics (see also past paper analysis) that have been examined last diet as highlighted below – Section A: Case Study - 2018 Jun Q1 (11 marks) – M&A and PESTEL Q2 (12 marks) – M&A Q3 (13 marks) – Capital structure & Dividend policy Q4 (14 marks) – Insider dealings & Balance scorecard Section B: Short/ Essay Questions - 2018 Jun Q5 (18 marks) – Cost of equity (DVM) & Business valuation Q6 (17 marks) – Indifference point Q7 (15 marks) – Dividend policy

Knowledge & Revision - Q&A sets: Practice again the typical exam questions as highlighted and discussed. What are the key topics: These are covered by the DEC 2018 diet - progress test and mock exams as follows - Progress Test Source of finance; risk relating to investment environment; issues communicate to external finance providers; listing requirements (main board vs GEM); benefits of issuing shares; corporate governance; acquisition strategy; hedging (forwards vs non hedge); interest rate parity; exchange rate risk (invoicing); NPV calculation; adjusting risk and uncertainty; cost of holding cash; importance of holding cash; theoretical price of bond; negative impact on issuing shares; debt financing; business risk, financial risk and risk management strategy Mock Exam & Final Mock Exam Valuation (PE, DCF); limitation in PE approach; valuation range; WACC; ROI/RI/EVA; breakeven point and safety margin; budgeted P&L; financial impact on breakeven point; project specific cost of capital; Ke vs Kd; effect on shareholder’s wealth; optimal capital structure; bid price; traditional costing vs ABC; DVM with CAPM, Kd, WACC calculation; issues of going a M&A deal; synergy; acquition premium; premium per share; hedging alternative; expected cost of call option; future cost of forwards; exchange rate calculation; expected return on equity; MM theory vs Pecking order theory; borrowing impact on business;

QP MB Corporate Financing

Page 2 All for you to PASS!

Exam techniques – Very important! Be a “marker friendly” candidate is very important to get a pass in the exam, make sure you obtain all the exam techniques to help the marker to locate the points from you answer booklet, below are some key areas: Use black or blue ink – DON’T USE RED OR GREEN INK Time management

You should allocate 1.8 minute per mark, don’t try to spend more than this for each mark so that you can finish all the questions in the exam.

Plan your answer before writing

Quick summary is always a good start before answering the question, you should: • Read the first paragraph first to get a basic understanding of the case • Read and underline the requirement from the question, allocate the time for each part of

question (Make sure you can identify how many requirements the examiner is looking for per question)

• Make a quick summary and underline the key words from the question (CRITICAL) • Think about what the examiner is asking but not what you want to answer • Think about how many points to answer (e.g. 3 Marks you need maximum 3 points)

Present answers well

• Use the right answer book (VERY CRITIAL) • Clearly identify the question number being answered in your answer book • Use headings, subheadings, simple sentence, short paragraphs and bullet points instead of

writing a long paragraph (No one likes long thing) • Separate page for each question which gives you spaces to add in more points later • Give yourself a few blank lines for each point • Underline some key words and phrases • Use tables to answer calculation question • Rule of “Introduction Application Conclusion”

Gain easy marks

• Yes/No question (Be reminded to make a full sentence but not just saying yes and no!) • Memo/Report format – Usually 2 easy marks (Make sure you writing the opening and

ending of a formal memo/report) • Write down the definition before answering every question • Examiners will always give hints from the case or the question itself, try to locate and

rephrase them to gain those easy marks I am so proud of you for your hardworking and efforts paid for the past few months, wish all of you the best of luck and see you in the FE exam. “You will never know your limits unless you push yourself to them. Keep fighting!” Best wishes,

MB Lecturer, HKCA

"All for You to . . . Pass”

Dec 2018

QP MC/PC – Business Assurance

All for you to PASS! HKCA

Hot Topics for QP Module C/PC – Business Assurance – Dec 2018 Exam

What has been examined last time:

Obviously time may be running out to study everything from ground zero. Below are the suggested materials you may wish to focus on: Master Guide. Focus on the mindmaps which would draw your attention on the issue areas.

Exam Guide. This gives you ‘hints’ as to what you need to consider for each topic.

Past Papers. Focus on the ‘thinking process’ and question analysis we covered in class.

What are the key topics:

This list is NOT intended for QUESTION SPOTTING. It is produced based on my lecturing experience and past paper analysis and should only be used as a guide for special attention but they are NOT THE ONLY TOPICS YOU SHOULD STUDY. My advice is not to do any question spotting but to study the whole syllabus well. You Audit Sense comes from your Knowledge. Code of Ethics: Independence; Confidentiality; Conflicts of Interest [T7]

Acceptance and Continuance [FM1]

Internal Controls [T2,FM4,FM5]; Information Technology [M5, FM10]

Assessing Risks of Material Misstatements; Risk Assessment Procedures [T1,T4,T6,M1,M6,FM3]

Audit Response; Audit Approach and Audit Procedures [T1,T2,T6,M2,M6,FM3,FM6, FM11]

Special Consideration: Bank Confirmation [M3]; Inventory/Inventory Count [M4]

Fraud [M8]; Non-Compliance of Law and Regulations [FM7]

Work of Internal Audit [FM2]; Service Organisation

Accounting Estimates and Fair Value [T3,M6,FM3,FM6, FM11]

Written Representation; Communication with TCWG [FM5]

Audit Opinion, Audit Reporting (HKSA 701 / 705) [FM12]

Going Concern; Subsequent Event [T8,T9]

Group Audit [M7]

Other Services [M9]

Corporate Governance [T5,FM8]

Don’t forget the basic but crucial exam skills:

Manage your time (1 mark = 1.8 minutes). The first few marks on a question are always easy

but last few are always hard to earn. Remember – you don’t have to score 100% to pass.

Read the case information carefully. Pinpoint to the specific topics that the questions are

REALLY ASKING. Do not write down everything you know.

Always apply to the case and tailor your answers to the questions.

Always state the relevant HKSA and HKFRS/HKAS.

Do not forget presentation and style of English. And your Hand-Writing as well Contact us (Lecturer@hkcaexam.com) in case you need final help. Good luck!

Best wishes,

MC Lecturer, HKCA

"All for You to . . . Pass”

Dec 2018

QP MD/PC – Taxation

All for you to PASS! HKCA

Hot Topics for QP Module D/PC – Taxation – Dec 2018 Exam

What study materials to focus now: During the last few weeks before the real exam, you are advised to review the core topics and updates as discussed and practiced during the revision classes. Review the mind maps and key notes in Master Guide to refresh your memory. What has been examined last time: Review the topics that have been examined recently as highlighted in the Past Paper Analysis given and make a reasonable guess. The 2018 Jun exam topics are as follows: Section A Q1 – Admin: Tax appeal mechanism (4 marks); Q2 – Profits Tax: compute taxable/ non-taxable and deductible/ non-deductible amounts (10 marks) and profits tax adjustments explanation (10 marks); Q3 – Profits Tax: QCTC requirements and concessionary tax treatment – DIPN 52 (12 marks); Q4 – Individual Income Tax: China IIT (5 marks) and DTA Article 14 (4 marks); Q5 – Ethics: tax practice re consultancy service (5 marks); Section B Q6 – Salaries Tax: taxability of expenses reimbursed and grant given by employer (14 marks) and self education expenses deduction re s.12(1)(a) and s. 12(1)(b) (8 marks); Q7 – Profits Tax: deduction of trademark expenses (12 marks); Q8 - Stamp Duty & Property Tax: purchase of properties (5 marks) & property tax computation (7 marks); Q9 – Admin: advance rulings (4 marks).

Revision Q&A: Practice again the typical exam questions as highlighted and discussed in classes. Practice the mock exams again within 3 hours limit.

What are the key topics: Note that it is not questions spotting and you are advised to cover the whole syllabus. The hot topics are covered by the progress test and mock exams as follows - Progress Test (1) Profits tax exposure on gain upon disposal of equity interest; (2) Deductibility of interest

expense; (3) EIT upon disposal of equity interest; (4) Stamp duty payable upon issuance of shares v. transfer of shares; (5) Property income - profits tax and SD implications; contingency principle; and granting a license to use property; (6) identify intangibles transferred and deductibility of cost of intangible assets; (7) s. 70A claim on omitted staff expense; (8) SD implication on acquisition of property or through holding shares of the property company, and potential tax risks; (9) Memo to advice on individual tax positions with supporting calculations including partnership allocation; (10) Tax planning and anti-avoidance provisions; nature and advantages of APA.

Mock Exam (1) DIPN 21 - trading source; and DIPN 45; (2) Share option deduction & taxability; (3) QCTC &

interest deduction; (4) Ethics – error in return; (5) DTA & s.8; and remuneration package tax planning; (6) Profits tax computation and adjustments; (7) SD on splitting conveyances; share options exercised, HLI and low interest rate loan – DIPN 16; (8) Consignment sales and group loss ; (10) Misc China tax issues.

Final Mock Exam (1) IRR5 – PE, DIPN 39 e-sales & deemed trading receipt re royalty income; (2) Salaries tax, PA &

SD; (3) Commencement and compliance obligations; (4) Tax planning for sale of assets; (5) Ethics – using estimates; (6) Change of accounting date; (7) Overseas entertainer’s performance in HK; (8) China Tax – CIT & DTA.

Don’t forget the common but useful exam skills: Apart from technically right, a key element to exam success is getting the exam techniques right. Remember to pay attention to instructions, manage your time properly, present answers well, make answers relevant, and gain easy marks as well. Making sure these exam skills are second nature and remember the magic number, i.e. 1 mark = 1.8 minutes.

When there is a will, there is a way to pass! Contact me (WhatsApp: 9800 7750 / WeChat: hkcamikeli) in case you need final help. Good luck to you all! Best wishes

Principal, HKCA "All for You to . . . Pass”

3 Dec 2018

HKCA www.hkcaexam.com All for you to … PASS! 1

HKICPA PC LAW - Hot Topics for DEC 2018 Exam

What materials to focus now? On the last few days before the exam, you are advised to review the key topics as discussed

during the revision course. Practice the typical exam questions as highlighted.

What has been examined recently? It will be helpful to see the topics that have been examined recently.

Section A: Case Study Director duties; Unfair prejudicial conducts; Insider dealing; Unanimous consent rule; Derivative actions; Irregularities principle; Promoter and their fiduciary duties; Charge

Section B: Short Questions Insider dealing; Auditors’ criminal liabilities; Removal of director; Turquand’s rule and authority of directors; Meeting procedures; Common law and statutory derivative action; Partnership and limited companies; Money laundering; Fraudulent trading; Sources of law; Variation of class rights; Unfair prejudicial conduct; Ratification of breach; Company name; Prospectus; Barrister and solicitor; Distribution in winding up; Irregularity principle; Auditor right to request for record; Separate legal entity; Allotment of shares; Buy-back; Registration of charge; Negative pledge clause; Loan to directors; Winding up foreign companies

What are the hot topics: Most of them are covered in the progress test and mock exams as follows:

Progress test:

Director duties; Allotment; Financial Assistance to purchase company’s own shares; Statutory derivative action; Knowledge of third parties in breach; Unfair prejudicial conduct; Winding up on just and equitable grounds; Stare decisis; Significant controller; Nature of articles; Dispensing AGM; Statutory derivative actions; Fraudulent trading; Authority of directors

Mock Exam: Director duties; Meeting procedures; Charge; Statutory interpretation; Object clause; Charge; Meeting procedures; Irregularity principle; Shareholders and creditors; Class rights

Final Mock Exam:

Director Duties; Ratification; Legal system; Source of law; Nature of articles; Non-Hong

Kong Companies; Meeting procedures; Auditor negligence; Significant controller;

Reduction of capital; Winding up

Don’t forget the common but useful exam skills: Study all the key topics; practice to write in simple and clear way; answer section B first before

you attempt the compulsory part; read the questions carefully and address the question;

Brainstorm the answer framework at least 3 times when you attempt section A. Remember to

manage your time (1 mark = 1.8 minutes). Finally believe in yourself and you can make it.

Contact us at Lecturer@hkcaexam.com in case you need final help. Good luck!

Issac YIP

"All for You to . . . Pass”

HKCA Learning Media Limited