The contents of this examiner’s guide are intended

as a guide and not professional advice. Although

every effort has been made to ensure that the
contents of this guide are correct for the
examination session indicated at the time of going
to press, the Singapore Accountancy Commission
makes no warranty that the information in this
guide is accurate or complete and accept no
liability for any loss or damage suffered by any
person acting or refraining from acting as a result
of the material in this guide.

The copyright in this publication is owned by the

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All rights reserved. No part of this publication may

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JUNE 2021 EXAMINATION

Contents
Page
Introduction 3

Section 1
Module Objective 6

Section 2
Marks Allocation and Examination Format 6

Section 3
Examiner’s Report 7

Section 4
Examination Questions 7

Section 5
Suggested Solutions for Individual Questions 8

Section 6
Common Examination Verbs 26

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INTRODUCTION

Disclaimer
The examination questions and suggested solutions in this publication have not been
updated for any changes in legislation, standards or syllabus. They must be used with
caution when preparing for any examinations.
Please also note that the solutions listed in this document are “suggested” solutions
only. Candidates who provide alternative, valid answers not covered in this document
will be awarded the appropriate credit.
For educational purposes, the suggested solutions are intended to be more
comprehensive and detailed than would be expected from a Candidate taking the
examination.

The Examiner’s Guide

The SAC provides the Examiner’s Guide to help Candidates to be better prepared for
the Singapore CA Qualification examinations. The Examiner’s Guide provides the
examiner’s report and suggested answers to the June 2021 Examinations.

Candidates are advised to approach the Registered Learning Organisations (RLOs)

for tuition support and should they have any queries.

About the Singapore Accountancy Commission (SAC)

The Singapore Accountancy Commission is the lead agency that spearheads the
development of Singapore’s accountancy sector with the vision of developing
Singapore into a leading global accountancy hub. SAC is working to achieve this
by deepening the skills of the accountancy talent pool; developing the industry; and
creating a hub and exchange by building Singapore into a centre for thought
leadership. It is a statutory body under the Ministry of Finance.

For more information, please visit www.sac.gov.sg.

About the Institute of Singapore Chartered Accountants (ISCA)

The Institute of Singapore Chartered Accountants (ISCA) is the national accountancy
body of Singapore. ISCA’s vision is to be a world-class accountancy body of trusted
professionals, contributing towards an innovative and sustainable economy. There are
over 32,000 ISCA members making their stride in businesses across industries in
Singapore and around the world.

Established in 1963, ISCA is an advocate of the interests of the profession.

Possessing a Global Mindset, with Asian Insights, ISCA leverages its regional
expertise, knowledge, and networks with diverse stakeholders to contribute towards
Singapore’s transformation into a global accountancy hub.

ISCA is the Designated Entity to confer the Chartered Accountant of Singapore - CA

(Singapore) - designation.

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ISCA is a member of Chartered Accountants Worldwide, a global family that brings

together the members of leading institutes to create a community of over 1.8 million
Chartered Accountants and students in more than 190 countries.

For more information, please visit www.isca.org.sg.

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FINANCIAL REPORTING STANDARDS EXAMINED

For Advanced Financial Reporting June 2021 examination, unless specified otherwise,
Candidates are to assume that all reporting entities adopt, for all the relevant years,
the Singapore Financial Reporting Standards (International) (SFRS(I)) that were
issued by the Accounting Standards Council as at 1 January 2021.

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Section 1
Module Objective

The Advanced Financial Reporting module builds upon the knowledge and skills
studied in the Principles of Financial Reporting module. Upon successful completion
of this module, Candidates will be able to demonstrate sound knowledge of and
apply the Conceptual Framework and the Singapore Financial Reporting Standards
(International) (SFRS(I)s) to produce a complete set of financial statements for
single entities and simple groups, including basic notes to the accounts. Candidates
will also be able to explain and advise on the application of the SFRS(I)s, including
the appropriate treatment and disclosure of hedge accounting, demonstrating
appropriate professional judgment.

Successful completion of the Principles of Financial Reporting module is strongly

encouraged before enrolling in the Advanced Financial Reporting module and the
Assurance module.

Section 2
Marks Allocation and Examination Format

Question 1 – (a), (b) and (c) 38 marks

Question 2 – (a) and (b) 22 marks
Question 3 – (a) and (b) 20 marks
Question 4 – (a) and (b) 20 marks

This module is assessed by way of a 3-hour 15 minutes restricted open-book

examination, and requires the use of a personal laptop. There are four questions,
and each question may have multiple parts requiring structured responses. For
instance, short answer questions, essay style questions, computations, or standard
format questions (e.g., extracts from financial statements, journal entries, etc.).

In order to achieve a pass in this module, a Candidate must achieve at least 50% of
the available marks in the final examination.

While 50% is the minimum pass mark, Candidates are strongly advised that to pass
the Financial Reporting module in the Singapore CA Qualification Professional
Programme they will need to significantly deepen their understanding of all aspects
of statutory financial reporting through focused study and sustained commitment.

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Section 3
Examiner’s Report

The Examiner’s Reports for the past examination sessions are available for download
on the SAC website.

Please click here to download the Advanced Financial Reporting June 2021
Examiner’s Report.

Section 4
Examination Questions

The Examination Questions for the past examination sessions are available for
download on the SAC website.

Please click here to download the Advanced Financial Reporting June 2021
Examination Questions.

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Section 5
Suggested Solutions for Individual Questions

Question 1 – (a), (b) and (c) (Total: 38 marks)

Apply SFRS(I) 3 Business Combinations, SFRS(I) 10 Consolidated Financial

Statements and SFRS(I) 1-28 Investments in Associates and Joint Ventures when
answering (a) and (b):

(a) Prepare the relevant consolidation and equity accounting entries for Hikma Pte
Ltd Group for the financial year ended 31 December 20x7. Show the
consolidation and equity accounting entries for the current financial year
separately from those relating to the prior years.

Present your answers in the following format:

Transaction date
DR Account Name xxx
CR Account Name xxx
(Narration for Journal Entry)
(27 marks)

31 December 20x7
CJE 1
DR Beginning retained earnings 6,784
DR Intangible asset 2,128
DR Inventories 460
DR Goodwill 3,845
CR Investment in Shire Pte Ltd 23,879
CR Non-controlling interests 6,678
(Elimination of investment in Shire)

CJE 2
DR Beginning retained earnings 532
DR Operating expenses 266
CR Intangible asset 798

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(Amortisation of intangible asset)

CJE 3
DR Beginning retained earnings 460
CR Inventories 460
(Reversal of undervalued inventories subsequently sold)

CJE 4
DR Beginning retained earnings 781.25
CR Cost of sales 781.25
(Record realisation of unrealised profit on the sale of goods for the financial year
ended 31 Dec 20x7)

CJE 5
DR Sales 6,500
CR Cost of sales 6,500
(Elimination of intercompany sales for the financial year ended 31 Dec 20x7)

CJE 6
DR Cost of sales 780
CR Inventories 780
(Elimination of unrealised profit in closing inventories)

CJE 7
DR Other income 99
CR Interest expense 99
(Elimination of intercompany interest)

CJE 8
DR Trade and other payables 2,799
CR Trade and other receivables 2,799
(Elimination of loan and interest outstanding)

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CJE 9
DR Other income 1,260
CR Dividend appropriation or retained earnings 1,260
($1,680 x 75%)
(Elimination of intragroup dividend paid by Shire)

CJE 10
DR NPAT – Non-controlling interest 1,299.06
[25% x ($5,461m minus $266m additional amortisation of intangible asset add
realisation of unrealised profit on opening stocks $781.25m minus $780m unrealised
profit on sale of goods)]
CR Non-controlling interest 734.06
CR OCI – Non-controlling interest 145
(25% x $580m)
CR Dividend appropriation or retained earnings 420
(25% x $1,680m)
(Record of non-controlling interest of Shire for the current financial year)

CJE 11
DR Beginning retained earnings 650.94
[25% x ($11,161m minus $460m reversal of undervaluation of inventories
subsequently sold minus $532m of amortisation of intangible asset from 1 Jan 20x5
to 31 Dec 20x6 minus $781.25m unrealised profit for the intragroup sale of goods
minus $6,784m as at acquisition)]
CR Beginning fair value reserves 380
[25% x ($1,120m minus $2,640m at acquisition)]
CR Non-controlling interest 270.94
(Record post-acquisition reserves for non-controlling interests of Shire from
acquisition to beginning of the current financial year)

CJE 12
DR Investment in Advanz Pte Ltd 1,432
CR Share of OCI of associate 224

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(40% x $560m)
CR Share of profit of associate 1,208
(40% x $3,020m)
(Equity accounting for the OCI and profit by Advanz for the current financial year)

CJE 13
DR Other income 300
CR Investment in Advanz Pte Ltd 300
(40% x $750m)
(Equity accounting for the dividend paid by Advanz for the current year)

CJE 14
DR Investment in Advanz Pte Ltd 208
CR Share of profit of associate 104
CR Beginning retained earnings 104
(Reversal of excess depreciation on overvalued manufacturing plant)

CJE 15
Investment in Advanz Pte Ltd 528
Beginning fair value reserves 564
[40% x (-$235m minus $1,175m)]
Beginning retained earnings 1,092
[40% x ($9,795m minus $7,065m at acquisition)]
(Equity accounting for post-acquisition reserves of Advanz from acquisition to
beginning of the current financial year)

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Question 1 cont.

(b) In relation to the Consolidated Statement of Financial Position as at 31

December 20x9, provide independent proof for the total retained earnings of the
group. (6 marks)

Retained earnings $’m

Hikma's adjusted retained profit 46,338

75% of Shire’s adjusted post-acquisition retained earnings 4,725

[75%^ x (Ending retained earnings $14,942m^ minus realisation of
undervaluation of inventories at acquisition $460m^ (CJE 3) minus
amortisation of intangible asset $798m^^ (CJE 2) minus elimination of
unrealised profit on closing inventories $600m^ (CJE 6) minus
beginning retained earnings as at acquisition $6,784m^ (CJE 1))]

40% of Advanz's adjusted post-acquisition retained earnings 2,208

[40%^ x (Ending retained profit $12,065m^ add reduced depreciation
on overvalued plant $520m^ (see workings in CJE 14) minus retained
earnings at acquisition $7,065m^)]

53,271

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Question 1 cont.

(c) Compute the fair value of consideration transferred from Holmes to Sherlock for
the above acquisition. Round your answers to the nearest dollar.
(5 marks)

$
2.5m ordinary shares by Holmes at $4.40 each 11,000,000
Immediate payment of cash of $3m 3,000,000
$3m payment as at 1 April 20x9; 2,830,189
($3,000,000^ / 1.06^)
Fair value of industrial building 14,500,000
Additional payment of $10m on 30 September 20x9 if the profit of 6,250,000
Sherlock exceeds $25m for the financial year ended 30 June 20x9.
The probability of Sherlock achieving this level of profit was
estimated to be 70%.
($10,000,000^ x 70%^ / 1.12^)
37,580,189

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Question 2 – (a) and (b) (Total: 22 marks)

(a) Prepare the journal entries for the financial years ended 30 June 20x1 to 30
June 20x5. Show all workings. Ignore the tax effect, if any.
(16 marks)

30 Jun 20x1
DR Remuneration expense (W1) 1,732,800
CR Remuneration payable 1,732,800
(Remuneration expense for the year ended 30 Jun 20x1)

30 Jun 20x2
DR Remuneration expense (W2) 1,798,000
CR Remuneration payable 1,798,000
(Remuneration expense for the year ended 30 Jun 20x2)

30 Jun 20x3
DR Remuneration expense (W3) 3,399,200
CR Remuneration payable 3,399,200
(Remuneration expense for the year ended 30 Jun 20x3)

30 Jun 20x4
DR Remuneration payable (W4) 2,610,000
DR Remuneration expense (W6) 90,000
CR Cash (W5) 2,700,000
(Payment for the exercise of SAR)

31 Dec 20x4
DR Remuneration payable (W8) 4,320,000
DR Remuneration expense (W9) 600,000
CR Cash (W7) 4,920,000
(Payment for the exercise of SAR)

Workings:

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W1: Remuneration expense for the year ended 30 June 20x1

[(9 x 20,000) + (23 x 12,000)] x $11.40 x 1/3 = $1,732,800

W2: Remuneration expense for the year ended 30 June 20x2

[(8 x 20,000) + (19 x 12,000)] x $13.65 x 2/3 - 1,732,800 = $1,798,000

W3: Remuneration expense for the year ended 30 June 20x3

[(9 x 20,000) + (20 x 12,000)] x $16.50 - $1,732,800 - $1,798,000 = $3,399,200

W4: Remuneration payable to be offset for SAR exercised (BOD)

Total remuneration payable based on fair value of SAR as at 30 June 20x3 = [(9 x
20,000) + (20 x 12,000)] x $16.50 = $6,930,000

Total fair value of unexercised SAR based on fair value as at 30 June 20x4 = (20 x
12,000) x $18 = $4,320,000

Change in fair value = $6,930,000 - $4,320,000 = $2,610,000

W5: Cash paid for SAR exercised

20,000 x 9 x $15 = $2,700,000

W6: Remuneration expense for the year ended 31 December 20x4

$2,700,000 - $2,610,000 = $90,000

W7: Cash paid for SAR exercised

(20 x 12,000) x $20.50 = $4,920,000

W8: Remuneration payable to be offset for SAR exercised

Total remuneration payable based on fair value of SAR as at 30 June 20x4 =
$4,320,000

W9: Remuneration expense for the year ended 31 December 20x5

$4,920,000 - $4,320,000 = $600,000

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Question 2 cont.

(b) On 1 July 20x3, the Remuneration Committee had wanted to retire the current
SAR plan for the Board of Directors and introduced a new share-based plan,
where the Directors could each elect to either:
(i) receive 25,000 share options at an exercise price of $10, or
(ii) be paid with cash equivalent to the value of 15,000 shares at the market
price on the date of payment, if they remained with Rotary on the vesting
date on 30 June 20x5.

Based on the available information above, explain how this new share-based
compensation would be accounted before vesting date for the financial year
ended 30 June 20x4 and 30 June 20x5.
(6 marks)

When the employee has a choice of settlement, Rotary has granted a compound
instrument with debt and equity component.

For the debt component, Rotary would have to recognise a remuneration expense
when service is provided over the vesting period and record the liability. The fair value
of the liability is remeasured and recognised as profit or loss.

For the equity component, Rotary would have to recognise, and equity is increased
when the service is provided over the vesting period.

At settlement date, the liability is measured at fair value. If Rotary issues share options
instead of paying cash to settle liability, the issue of the options is treated a
consideration for the settlement of liability. If Rotary settles the liability in cash, the
equity component recognised previously in equity remains in equity, or it can be
transferred to another component of equity.

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Question 3 – (a) and (b) (Total: 20 marks)

Apply SFRS(I) 1-36 Impairment of Assets when answering the following:

(a) Discuss TWO impacts of the pandemic outbreak on the impairment assessment
for the financial year ended 30 June 20x0.
(4 marks)

The impact of the pandemic outbreak could form a strong indicator of impairment of
assets, as it constitutes to operational disruptions to the business as well as its
revenue and profitability.

When computing the value-in-use of the CGU, the estimate of future cash flows used
to compute value-in-use would need to take into consideration the effects of the
pandemic outbreak. In addition, the discount rate applied to discount these estimated
future cash flows might be higher to reflect the higher level of uncertainty/risk of the
forecasted cash flows.

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Question 3 cont.

(b) Perform an impairment test for Oishii, calculating and stating the allocation of
any impairment loss and total impairment loss recognised for the financial year
ended 30 June 20x0. Show all workings. Round your answers to the nearest
thousand dollar. (16 marks)

Workings in $’000

Computation of adjusted carrying amount:

• Country X – Restaurant = ($2,000 + $2,170) + [$1,970 / ($1,970 + $840) x $860] =
$4,773
• Country X – Food Delivery = ($650 + $580) + [$840 / ($1,970 + $840) x $860] =
$1,487
• Country Y – Restaurant = ($1,500 + $1,920) + [$2,390 / ($2,390 + $540) x $680] =
$3,975
• Country Y – Food Delivery = ($390 + $550) + [$540 / ($2,390 + $540) x $680] =
$1,065

Surplus / (deficit) of the recoverable amount over the carrying amount:

• Country X – Restaurant = $2,500 - $4,773 = ($2,273), i.e. there is impairment.
• Country X – Food Delivery = $1,540 - $1,487 = $53, i.e. there is no impairment.
• Country Y – Restaurant = $2,990 - $3,975 = ($985), i.e. there is impairment.
• Country Y – Food Delivery = $1,150 - $1,065 = $85, i.e. there is no impairment.

Allocation of impairment:
• Impairment loss of $2,273 in Country X – Restaurant is allocated to Goodwill
$2,000, carrying amount of furniture and fittings $214 [273 x 2,170 / (2,170 + 603)]
and carrying amount of kitchen premise $59 [273 x 603 / (2,170 + 603)].
• Impairment loss of $985 in Country X – Restaurant is allocated to Goodwill $985.

Net carrying amount of the CGUs after impairment test:

• Country X – Restaurant = $2,500
• Country X – Food Delivery = $1,487

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• Country Y – Restaurant = $2,990

• Country Y – Food Delivery = $1,065
• Singapore office = $2,400
Revised carrying amount of business = $10,442

Further impairment loss = $9,500 - $10,442 = $942 to be allocated to the Singapore

office

Total impairment loss = $942 + $2,273 + $985 = $4,200

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Question 4 – (a), (b), (c) and (d) (Total: 20 marks)

(a) Prepare the journal entries for Aero Lines to record the events and transactions
as at 30 April 20x0 and 31 May 20x0 in accordance with SFRS(I) 9 Financial
Instruments. Indicate clearly in your answer if the fair value changes in the
hedging instrument and hedged item are to be recognised as a profit, a loss, or
an other comprehensive income item. (12 marks)

30 Apr 20x0
DR Hedging instrument 840,000
CR Gain on hedging instrument (P/L) 840,000
(Fair value through P/L of hedging instrument)

DR Loss on Inventory (P/L) 532,000

CR Inventory 532,000
(Fair value through P/L of hedged item)

31 May 20x0
DR Loss on hedging instrument (P/L) 196,000
CR Hedging instrument 196,000
(Fair value through P/L of hedging instrument)

DR Inventory 392,000
CR Gain on inventory (P/L) 392,000
(Fair value through P/L of hedged item)

DR Cash 644,000
CR Hedging instrument 644,000
(Settlement of hedging instrument, i.e. futures contract)

DR Cash 14,700,000
CR Sales 14,700,000
(Sales of crude oil)

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DR Cost of sales 14,420,000

CR Inventory 14,420,000
(Cost of crude oil sold)

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Question 4 cont.

With reference to Ethics Pronouncement (EP) 100, the ISCA Code of Professional
Conduct and Ethics:

(b) Identify ONE fundamental principle which is being threatened from the
perspective of the Accountant. (2 marks)

Any one of the following:

The Accountant’s objectivity could be threatened. The principle of objectivity

imposes an obligation on all professional accountants not to compromise their
professional or business judgement because of bias, conflict of interest, or the
undue influence of others. The Accountant would not be objective if he agreed to
increase the impairment on the investments which are not impaired as year-end,
instead of writing back the impairment.

Or

Candidates may say that the Accountant would lack integrity if he agreed to increase
the impairment on the investments which are not impaired as year-end, instead of
writing back the impairment. The principle of integrity imposes an obligation on all
professional accountants to be straightforward and honest in all professional and
business relationships. Integrity also implies fair dealing and truthfulness.

Or

A similar argument could be made for Professional Behaviour. The principle of

professional behaviour imposes an obligation on all professional accountants to
comply with relevant laws and regulations and avoid any action that the
professional accountant knows or should know may discredit the profession. The
Accountant would not be objective if he agreed to increase the impairment on the

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investments which are not impaired as year-end, instead of writing back the
impairment.

Or

It could also be argued that Professional Competence and Due Care applies. In this
case, the principle of professional competence and due care imposes an obligation on
all professional accountants to act diligently and responsibly in accordance with
applicable technical and professional standards when performing professional
activities. The Accountant would not be exercising technical competence and/or due
care if he agreed to increase the impairment on the investments which are not impaired
as year-end, instead of writing back the impairment.

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Question 4 cont.

(c) Describe ONE threat that could compromise, or be perceived to compromise,

the Accountant’s compliance with the fundamental principles identified in (b)
above. (2 marks)

Any one of the following:

Intimidation threat – the threat that a professional accountant will be deterred from
acting objectively because of actual or perceived pressures, including attempts to
exercise undue influence over the professional accountant. The Accountant may not
want to defy the Finance Manager by not adhering to his request. He/she could
be concerned his/her job security would be affected.

Or

Self-interest threat – the threat that a financial or other interest will inappropriately
influence the professional accountant’s judgement or behaviour. The Accountant
may be concerned that the results of the company would suffer, resulting in an
unfavourable performance for the company and the department. Hence, he might
be tempted to follow the Finance Manager’s suggestion to increase the impairment of
the investments so that he could protect his job.

Or

Familiarity threat – the threat that due to a long or close relationship with an employer
or the customer, a professional accountant will be too sympathetic to their interests
and too accepting of their work/advice. The Accountant may want to maintain the
working relationship with the Finance Manager and tend to comply with his
proposal.

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Question 4 cont.

(d) The Accountant felt uneasy about the discussion with the Finance Manager.
Recommend TWO appropriate actions that the Accountant could take to
eliminate or reduce the threat to the fundamental principle identified in (c) above.
(4 marks)

Any two of the following:

The Accountant could consult with his superiors, e.g. the Finance Director, to
reduce the threat to conform to the Finance Manager’s inappropriate request.

Or

Since the Aero Lines Ltd is listed, the Accountant could consult the Audit Committee,
so that they could investigate on the matter accordingly.

Or

Separately, if Aero Lines Ltd operates an effective, well-publicised complaints

system, the Accountant could highlight the Senior Management’s unethical behaviour
via this system and allow the 'system' to appropriately deal with the issue.

Or

If the threat to compliance with the fundamental principles cannot be eliminated or

reduced, the Accountant may consider obtaining professional advice from the
relevant professional body or from legal advisors.

END OF PAPER

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Section 6
Common Examination Verbs

To assist Candidates to best formulate their answers they will be given the following
list of common verbs and their descriptions.

As an aspiring Chartered Accountant of Singapore, you must be able to

communicate clearly, concisely, and professionally in order to work effectively with
others.

Apart from testing your technical ability, the Singapore CA Qualification

examinations are also assessing your communication skills, in particular, your ability
to frame your answers using language that is clear to a layperson. Obviously, when
marking the answer scripts, markers are looking for accurate answers that are
focused on the question asked, but they are also looking for answers that convey
information in a way that others can easily understand and that show a deep
appreciation for any ethical and professional issues posed.

The following list of commonly used verbs ("action" words) will help you identify what
the examiner expects from your answer and how you can maximise your marks.
You will see that some of these verbs are quite similar and some are even
interchangeable. The irony is that most questions in an examination paper will not
contain a question mark, so you have to be able to determine what the examiner
wants by picking out the verb in the instruction.

Account Account requires you to show how to record an element in the

financial statements appropriately. This might be by means of a
journal entry, T-account, or an extract from the financial
statements. Remember, a journal or a T-account is only
complete if it shows the date of the entry, the correct accounts,
the correct amounts, and has a description (narration) - easy
marks are often thrown away through carelessness.
Advise / Give As a Chartered Accountant of Singapore, your work will invariably
advice require you to form an opinion about the most appropriate course
of action, or offer alternative courses of action depending upon
the situation. This type of question requires you to give specific
guidance to an individual or a group (e.g. a taxpayer, audit client,
management, etc.), so your answer must provide specific
information or make a recommendation tailored to the individual
or group.
Analyse Identify the key components, look for similarities and differences,
look for patterns or outliers, and weight up the issues. If there is
numerical data, you might need to provide a range of answers
depending on how you substitute the data into your model. Make

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sure you state any implications of your answer and any

assumptions that you make.
Apply This instruction requires you to relate your answer back to a
specific document/s or set of facts. Alternatively, you may be
required to use a specific formulae, model, or process. For
instance, "Apply the relevant Singapore Financial Accounting
Standard to …". Another example would be "Apply the rules for
recording and reporting foreign currency transactions …". Apply
and With reference to are similar.
Appraise Make a judgment about the value, quality, outcomes, results, or
size. Often there will be a qualifier in the instruction, which will
tell you exactly what to appraise. For instance, "Appraise
Company X's credit worthiness …". Professional scepticism and
professional judgment are called for when making an appraisal.
Appraise and Assess are interchangeable.
Assess Make a judgment about the value, quality, outcomes, results, or
size. Often there will be a qualifier in the instruction, which will
tell you exactly what to assess. For instance, "Assess the
adequacy of the disclosures in the financial statements relating
to …". Professional scepticism and professional judgment are
called for when making an assessment. Appraise and Assess
are interchangeable.
Bullet points Unless specifically asked for, only use bullet points in your
answer as an absolute last resort if you are running out of time.
A quarter of a mark is better than zero.
Calculate / Do the number crunching and derive the correct answer. Make
Compute sure that you write down your workings and crosscheck your
numbers.
Comment Comment is similar to evaluate in that you are required to make
a judgment or provide your opinion based on the facts at hand.
Professional scepticism and professional judgment are called for
when commenting.
Compare and Compare requires you to show how things are similar and/or
Contrast different while contrast requires you to show how things are
different or opposite. Even if you are asked just to compare, you
must indicate both the similarities and differences.
Critically Critically requires that your answer be more extensive than if
(analyse / you were asked to analyse or evaluate the data. Your answer
evaluate) must add a greater degree or level of accuracy, depth,
knowledge, understanding, logic, questioning, reflection, and
quality to your analysis or evaluation.

Remember, critically requires you to consider both the positive

and negative points and apply professional scepticism (a

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questioning mind) in conjunction with professional judgment.

Often when an examiner asks you to critically evaluate or
analyse something it is because there can be more than one
right answer, so you have to convincingly defend your opinion as
part of your answer.
Define Like list, you are most unlikely to ever be asked just to define a
term, particularly in an open-book examination unless it is a term
that requires you to communicate your understanding rather than
copying down someone else's definition. For instance, "Define
in your own words …".
Demonstrate Demonstrate requires you to prove or disprove something
beyond any doubt, or show that it applies in the situation
described by giving evidence (for instance, provide an example).
The evidence can be from the facts given or from your general
knowledge and experience. Demonstrate and Illustrate are
similar.
Describe Describe requires you to provide the characteristics and features
of an item or situation. For instance, "Describe the audit
procedures to verify …" requires you to state the specific audit
procedure/s that you would use without going into step-by-step
detail of how to perform that procedure.
Detail Detail requires you to give very specific instructions or advice.
For instance, "Detail the audit procedures to verify ..." requires
you to provide step-by-step instructions. Another example is
"Detail how the findings from the site visit will affect the planning
of the statutory audit". This instruction requires you to state the
positive and negative consequences in relation to the site visit
and the planning of the audit. Don't forget to think about the
future and the past, not just the present when stating the
consequences.
Discuss Discuss requires you to provide the for and against arguments,
you cannot have a discussion without opposing views otherwise
it would be just a conversation. If discuss is placed near the
front of the instruction, then it requires you to provide an answer
that is similar to explain, but addresses the for and against
arguments. For instance, "Discuss why numerical valuation is
essential when buying or selling a small business".

However, if there is a statement and discuss is placed at the

end, your answer must be in the form of an essay with the
following elements:

• An introduction, which declares whether you agree,

disagree, partly agree, or partly disagree with the
statement;

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• The body of your answer, stating: i) Why it is possible to

agree and ii) why it is possible to disagree with the
statement. You should provide examples to support both
points of view; and
• A conclusion that proves your original position.

An example of a discuss question that requires an essay style

answer would be "Numerical valuation is not essential when
buying or selling a small business because the actual selling
price is the outcome of negotiation. Discuss".
Distinguish To note differences between. For instance, "Describe what is
meant by the term tax planning and distinguish it from tax
evasion". Apart from describing what tax planning involves (1-2
marks max), you need to explain how the two terms are different
and how they are similar. However, providing a list of differences
and similarities is insufficient - complete sentences are essential.
In addition, it is important that you also mention any other
relevant factors (e.g. the ethical and legal issues).
Evaluate Pass judgment on or provide your opinion based on the facts at
hand. When making an evaluation, there are often
predetermined criteria that you will use to base your opinion on.
The key here is to give your opinion or make a judgment of the
facts, but providing just a description of the facts is insufficient.
Professional scepticism and professional judgment are called for
when making an evaluation. Examine and Evaluate are
interchangeable.
Explain As a Chartered Accountant of Singapore, you will be frequently
called upon in your work to explain difficult concepts and
technical issues to people who are not accounting trained. This
is where your ability to share your knowledge using simple
everyday terms will be most needed.

Explain requires you to write at least several sentences

conveying how you have analysed and synthesised the
information in a way that a layperson can easily understand the
concept or grasp the technical issue at hand. For instance,
"Explain whether an 'emphasis of matter' paragraph or an 'other
matter' paragraph would be most appropriate in this instance", or
"Explain how a partnership is assessed for tax".
Examine Pass judgment on or provide your opinion based on the facts at
hand. When examining the facts given, there are often
predetermined criteria that you will use to base your opinion on.
The key here is to give your opinion or make a judgment of the
facts, but providing just a description of the facts is insufficient.
Professional scepticism and professional judgment are called for
when making an evaluation. Examine and Evaluate are
interchangeable.

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Identify Identify is similar to list, but requires you to also provide an

explanation as to why the item that you have identified is
relevant to the facts given in the question.
Often identify will require you to select a specific issue or issues,
but not all issues, so you need to look out for any qualifying
words. For instance, "Identify the Board Matters …" is asking
you to focus solely on issues that relate to Board Matters so if
you digress and identify remuneration issues, you will not score
well. Another example is "Identify the companies that qualify as
members of the group for the purposes of group tax relief". In
order to score well in this second example, you need to identify
the companies and state why they are included in the group. You
also need to state if a company is not included and why.
Justify Whenever you see the word justify you must provide reasons for
your answer, in other words, provide support for your argument
or conclusion. If you fail to justify your answer, you will lose
valuable marks.
Illustrate / Give Illustrate requires you to provide an example, either from the
examples facts given, a real-life example or a made up example to
illustrate the point you are trying to make. Illustrate and
Demonstrate have similarities.
List Prepare an itemised list. Although you are unlikely to ever be
asked just for a list of items, it is important to remember that
many of the common verbs used by examiners require you to
begin with a mental list of issues to address.
Outline Outline requires you to provide a general overview of the
situation and indicate the main features. Outline is used when
the question is worth only a couple of marks, but a single
sentence is usually never enough to achieve full marks.
Prepare Prepare requires you to produce your answer using a specific
format. For instance, "Prepare the Statement of Cash Flows
for …" or "Prepare all the relevant journals …". Remember, a
journal is only complete if it shows the date of the entry, the
correct accounts, the correct amounts, and has a description
(narration) - easy marks are often thrown away through
carelessness.
Propose Put forward (for example, a point of view, idea, argument,
alternatives, etc.) for consideration or action. For instance,
"Based on the facts of the case, propose the most tax-effective
vehicle …", or "Propose audit adjusting entries to correct …".
Quantify Provide a numerical value (an exact calculation) or a range of
values (upper/lower limits, average, likely values, etc.). For
instance, "Quantify the misstatement in the 'investment in
subsidiary' in the Statement of Financial Position". As with

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calculate and compute, you should always show your workings

and crosscheck your numbers.
Record Record is similar to prepare in that you may need to perform a
calculation and show the specific components in an appropriate
format. For instance, "Record the fair value gain/loss and
indicate if the gain/loss is recognised as profit or loss or other
comprehensive income".
Recognise Recognise requires you to distinguish between various
components and to be able to state how each component should
be treated. For instance, "… and indicate if the gain/loss is
recognised as profit or loss or other comprehensive income".
Identify and Recognise have similarities.
Recommend Make a statement about the most appropriate course of action.
If there is more than one possible course of action, state which
action you would choose and why (justify your choice). Your
professional judgment and your ability to analyse and synthesis
the wider situation are critical to scoring well in these types of
questions. Don't forget to think about the future and the past, not
just the present when making a recommendation.
Respond / This is your right of reply. When you are asked to respond, it is
Reply usually in reply to a comment made by someone else (although
you can also be asked how you would respond in a particular
situation). For instance, "Respond to the Chairperson regarding
her comment on impairment". Whenever you are asked to
respond, you must always justify your opinion or the actions you
would take.
Use / Using This instruction tells you the type of model that you must use
when formulating your answer. For instance, "Using the Market
Approach, …".
State State is similar to list, but the items require your professional
judgement. For instance, "State any restrictions that apply". One
of the easiest ways to make sure that you state comprehensively
is to think, "list AND justify". You will note that state appears in
many of the verb descriptions given.
Summarise Provide a concise description. Summarise is similar to
describe, but in a condensed format.
Synthesise Bring together the relevant elements to make a whole.
Synthesis is always required as part of an evaluation.
Synthesis is how you have made sense of (comprehended) the
facts of the case.
To what extent This instruction requires you to advance arguments in favour of
a position or point of view and respond to or take into
consideration the opposing arguments or points of view. You
must always justify your answer.

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Translate For the purposes of the Singapore CA Qualification

examinations, translate refers to the conversion of data from one
currency into another currency (although translate can refer to
spoken and written language as well).
With reference This instruction requires you to relate your answer back to a
to specific document/s or set of facts. For instance, "With
reference to relevant Singapore Financial Reporting Standards,
explain the risk of material misstatements relating to …". Failure
to make specific mention of the document/s or facts in your
answer will result in a substantial loss of marks.

END OF EXAMINER’S GUIDE

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