Strategic Business

Reporting (SBR)
March/June 2023
Examiner’s report
The examining team share their observations from the
marking process to highlight strengths and
weaknesses in candidates’ performance, and to offer
constructive advice for those sitting the exam in the
future.

Contents
General comments .............................................................. 2
Question 1 – Greer Co ........................................................ 3
Question 2 – Cutherd Division ............................................ 6
Question 3 – Fernanda Co .................................................. 9
Question 4 – Eloa Co ........................................................ 12

Examiner’s report – SBR March/June 2023 1

General comments

This examiner’s report should be used in conjunction with the published March/June
2023 sample exam which can be found on the ACCA Practice Platform.

In this report, the examining team provide constructive guidance on how to answer
the questions whilst sharing their observations from the marking process,
highlighting the strengths and weaknesses of candidates who attempted these
questions. Future candidates can use this examiner’s report as part of their exam
preparation, attempting question practice on the ACCA Practice Platform and
reviewing the published answers alongside this report.

Often non-technical factors have an impact on candidates’ chances of passing the

Strategic Business Reporting (SBR) examination. One such non-technical skill is time
management. Good time management skills will help relieve pressure and stress
particularly in the later stages of the examination. Candidates should prioritise the
questions that they are going to answer and strategically divide their time. This does
not necessarily mean answering question one first. Question one can be complex and
long and, by answering this question first, candidates can put themselves under
pressure early in the examination, particularly if too much time is spent on the question.
Question 2 which focuses on accounting and ethics is probably a better place to start.
Candidates should be realistic about what they can achieve in the time allocated to a
question. It is a mistake to set the scope of the answer too wide and too general.
Answers like this often bring in lots of knowledge-based facts and little application of
knowledge to the scenario. Very few marks are allocated to rote-learned knowledge.
Answers that are concise, relevant and applied will score better than answers that are
broadly conceived and not answering the question.

Candidates should also make sure that they know exactly the format of the paper
before they take the examination. For example, question one is based on the financial
statements of group entities (including statements of cash flow) and requires
consideration of financial reporting issues. It is important to note that candidates are
often required to discuss the principles behind any calculations they provide. The
preparation of a full set of group financial statements or group statement of cash flows
from scratch is not required. Candidates are unlikely to obtain a pass mark on this
question by simply preparing numerical solutions.

Note: from September 2023, the format of question one will change and
candidates will be given a pre-formatted spreadsheet on which they will answer
part of the question.

Examiner’s report – SBR March/June 2023 2

Question 1 – Greer Co

(a) Using exhibit 1, evaluate the reasons why Greer Co, rather than Layout
Co, can be identified as the acquirer in the business combination.
(10 marks)

Part (a) of this question required candidates to evaluate why a company (Greer Co)
was deemed to be the acquirer in a business combination. This requirement carried
10 marks.

Candidates gained marks for two key elements. The first was for setting out the
principles of control, IFRS 3 Business Combinations ‘substance over form’ approach
and how an acquirer is identified. The second area where marks were obtained was
the application of these principles to the scenario. The arguments were finely
balanced, but the question did advise candidates as to which company was actually
the acquirer. Therefore, candidates’ answers should have been written with this in
mind, whilst at the same time discussing why the circumstances might point to the
other company (Layout Co) being deemed to be the acquirer.

This question was answered well by those candidates who discussed relevant IFRS
Accounting Standards and then applied the principles to the scenario. Other
candidates did not fully understand the control relationship, or simply gave information
from the scenario without adding any further reasoning as to how this information
demonstrated acquisition or control.

(b) Using exhibit 2, explain, with calculations, how the goodwill on the
acquisition of Layout Co on 1 April 20X7 will be determined within the
consolidated financial statements of the Greer Group for the year ended 31
December 20X7.

(5 marks)

Part (b) of the question required candidates to explain, with calculations, how goodwill
on acquisition was determined within the consolidated financial statements.

Candidates were asked to explain and calculate. This means that candidates were
expected to describe in more detail the calculation of goodwill by stating relevant facts.
There were 5 marks in total for this part of the question with the principles being
awarded 2 marks. This element was answered reasonably well by most candidates.
However, very few candidates gave any explanation or discussed the principles
behind the calculation of goodwill as the requirement asked for. This meant that many
candidates unnecessarily limited their marks. Many correctly calculated the amount of
the consideration value of the shares issued and also stated correctly the fair value of
the net assets. The weakest element of the answer was the calculation of the fair value
of the equity interest before the business combination. This was unfortunate, given
that this is a well-established and often examined element of the syllabus. There was
a loss on the previously held interest which was recognised in profit or loss.

Examiner’s report – SBR March/June 2023 3

As an illustration of the way marks can be lost by not discussing the calculation, a
mark would be awarded for not only calculating the loss but also for stating that the
loss is recognised in profit or loss.

(c) Using exhibit 3, explain, with calculations, how the Greer Group would
account for the investment in Gae Co in the consolidated financial
statements for the year ended 31 December 20X7.
(9 marks)

Part (c) of the question required candidates to explain how an investment of 10% and
a further investment of 12% in a company would be dealt with in the consolidated
financial statements.

As the original equity investment was not held for trading, candidates needed to
discuss that an entity can make an irrevocable election at initial recognition to measure
it at fair value through other comprehensive income (FVTOCI) with only dividend
income recognised in profit or loss. Any changes in fair value are never recycled to
profit and loss if this election is made.

The additional investment created an associate relationship and therefore, the

investment would be accounted for using equity accounting in the consolidated
financial statements from the date of the additional purchase. Candidates were
expected to discuss that, under equity accounting, the investment is initially
recognised at cost and adjusted thereafter for the post-acquisition change in the
investor's share of the investee's net assets.

The problem arises as to what constitutes ‘cost’ but the question stipulated that the
company used fair value as ‘deemed cost approach’ and, therefore, on the
acquisition of the second tranche of shares, a fair value gain was measured and
recorded in OCI. Candidates were then expected to calculate the subsequent value
of the investment in associate in the consolidated statement of financial position at
the year end. Marks are always given for an explanation of the equity method as well
as, in this case, the calculation of share of post-acquisition profits attributed to the
associate.

Most candidates made a good attempt at this part of the question. However, the
discursive element of the answers was often limited to an explanation of what
constitutes an associate rather than the wider issues concerning the treatment before
the company was an associate and deemed cost at fair value. Many candidates did
not realise that the fair value of the original holding should be used in the calculation
of the investment in the associate, but most candidates made a good attempt at the
calculation of the post-acquisition profits with the most common error being not to time-
apportion. Very few candidates discussed the issues surrounding the recognition of
the dividend generally and in profit or loss specifically.

Examiner’s report – SBR March/June 2023 4

 (d) Using exhibit 4, calculate and briefly outline, in accordance with IFRS 9
Financial Instruments, how the loan would be accounted for during the
period 1 January 20X6 to 31 December 20X7.
(6 marks)

Part (d) of the question required candidates to calculate and briefly outline how a loan
would be accounted for in the financial statements over a two-year period.

The majority of the marks were allocated to an amortised cost calculation. However,
many candidates did not correctly treat the transaction costs at initial recognition and
did not appear to understand the difference between the effective interest rate and the
interest paid. The interest expense recognised in profit or loss was calculated using
the effective interest rate, but many candidates treated the interest paid as the interest
expense.

Marks were awarded for candidates’ own figures if they adjusted the current carrying
value of the liability to the present value of the modified cash flows and recognised a
gain in profit or loss in the financial statements. Surprisingly some candidates treated
the loan as a financial asset. Overall, the performance was disappointing.

Conclusion
Generally, the performance was good for this question, but some core areas of
syllabus knowledge still need improvement.

Examiner’s report – SBR March/June 2023 5

Question 2 – Cutherd Division

Question 2 involves the consideration of the reporting and ethical implications of

some accounting issues presented in a specific scenario. ACCA’s Code of Ethics
and Conduct defines responsibilities in terms of the duties of students and members
and provides guidance on ethical issues that can arise. It is impossible to set out a
response to every situation, and therefore ACCA have to rely on the students and
members to deduce what is right or wrong. In this exam, therefore, candidates must
demonstrate their understanding of the fact that ethics and integrity are central to the
accounting profession and be able to exercise sensitive professional and moral
judgments.

Two professional marks are awarded to this question and the requirement within the
question always clarifies how the professional marks will be awarded.

(a) Discuss how the advancement of information technology impacts on the

ethical responsibilities of an accountant.

Note: There is no need to refer to any specific exhibit to answer part (a).
(4 marks)

Part (a) required candidates to discuss how the advancement of information

technology impacts on the ethical responsibilities of an accountant. There was a
range of answers which were possible and acceptable in answering the question.
Generally, candidates were awarded 1 mark for each valid discussion point. There
was no need to refer to any specific exhibit to this part.

Part (a) was generally answered well with a significant number of candidates
achieving full marks. Candidates tended to be knowledgeable regarding
advancements in technology and were able to apply themselves by mentioning that
accountants need to be competent, up to date, and undertake continuing
professional development. Candidates also demonstrated their understanding of the
principle of confidentiality.

Some candidates answered part (a) and part (b) in one section, which causes
problems for the marker. Candidates must make it clear which requirement they are
answering.

Examiner’s report – SBR March/June 2023 6

 (b) Discuss the ethical issues faced by the accountant (Mr Ebrima) and the
internal auditor (Mr Franklin) in Herding Co and any actions they should take
to address these issues.
(6 marks)

Professional marks will be awarded in part (a) and (b) for the quality of the ethical
discussion and identification of appropriate actions.
(2 marks)

Part (b) required candidates to discuss the ethical issues faced by an accountant
and an internal auditor and any actions they should take to address these issues.
The scenario included a centralised procurement system that was inefficient and did
not meet the needs of the organisation as a whole. The question also dealt with
ethical issues relating to dominance by one figure in the organisation, the effect of
personal relationships and pressures placed upon individuals.

Candidates needed to discuss the fundamental principles of ethics that could

potentially be threatened by a broad range of circumstances. For example,
intimidation threats, lack of objectivity, and lack of professional competence.
Candidates were required to identify both actual and perceived ethical threats.
Candidates should always discuss the ethical principle and then apply this principle
to the scenario. It should be noted that simply cutting and pasting elements of the
scenario without appropriate discussion will not attract any marks.

Professional marks were awarded in part (a) and (b) for the quality of the ethical
discussion and identification of appropriate actions. The actions identified by
candidates need to be realistic and specific to the circumstances. The accountant
should take whatever actions might be available, as soon as possible, to address the
consequences of the breach of the ethical code. These actions will differ depending
upon the circumstances in the scenario. Therefore, when a candidate simply gives a
standard set of actions such as resign, call ACCA etc without application to the
scenario, the candidate will score very few marks. It is true that an accountant should
determine whether to report the breach to the relevant parties. However, the relevant
parties are not just ACCA but include those who might have been affected by the
breach, as well as another professional or regulatory body, or an oversight authority.
There are also actions which should be considered before a breach of the ethical
code is reported to the relevant authorities.

This part of the question was generally answered well. In the past candidates have
struggled with applying specific ethical principles and more importantly mentioning
any threats to those principles. This was not the case with this question. However,
there were still many candidates who cut and paste the exhibit into their answer
without relevant comment.

Examiner’s report – SBR March/June 2023 7

 (c) Explain the possible effects of IAS 38 Intangible Assets and IAS 36
Impairment of Assets on the accounting treatment of the purchase of the
Cutherd division’s procurement system and development costs, in the
financial statements for the year ending 31 December 20X8.
(8 marks)

Part (c) required candidates to explain the possible effects of IAS 38 Intangible
Assets and IAS 36 Impairment of Assets on the accounting treatment of the
purchase of a procurement system and development costs. Part (c) was answered
well with the majority of candidates able to present the definition of an intangible
asset and the conditions required to capitalise development costs. However, as
discussed previously, rote-learnt knowledge does not attract many marks, so it is a
mistake for candidates to simply give definitions without applying them to the
scenario. Of the marks available for this part of the question only 2 marks were given
for IAS 38 and IAS 36 definitions.

This requirement gave candidates a good opportunity to achieve full marks. The lack
of possible future benefits of the system and potential technological obsolescence
cast doubt on its classification as an asset. As a result, the expenditure on the
system may have been correctly expensed in the statement of profit or loss.
However, if candidates discussed reasons why the system should have been
classified as an intangible asset, then due credit was given.

The cost of the procurement system, if capitalised as an intangible asset, would have
to be tested for impairment at the year end, although it is difficult to calculate the
recoverable amount of a procurement system. The recoverable amount of additional
internal development costs is more likely to be zero thus justifying the write off to
profit or loss.

Candidates often didn’t discuss the arguments for and against capitalisation, simply
stating that the system and development costs should or should not be capitalised.

Conclusion
Overall, the question was answered well.

Examiner’s report – SBR March/June 2023 8

Question 3 – Fernanda Co

Question 3 examines the candidates’ knowledge and application of a range of IFRS

Accounting Standards, specifically in this case, IAS 37 Provisions, Contingent
Liabilities and Contingent Assets, IAS 32 Financial Instruments: Presentation, IAS 1
Presentation of Financial Statements and IAS 7 Statement of Cash Flows.

(a) Discuss the acceptability of Fernanda Co’s decision not to record any
liability for the roof collapse in the consolidated financial statements for the
year ending 31 December 20X7.
(7 marks)

Part (a) of the question dealt with an industrial accident and the consequences from
a financial reporting perspective. This is an application of IAS 37, a core topic from
the ACCA Financing Reporting module. However, a surprising number of candidates
appeared ill-prepared to deal with the requirement, which asked for a discussion on
whether the decision not to record a liability for a roof collapse in a building the
company had constructed was acceptable.

The scenario described how “no legal action” had been brought against Fernanda
Co by the reporting date (relating to the existence or not of an obligation), and that
“investigators were assessing the responsibilities” for the collapse which was
expected two months after the reporting date (relating to the determination of
probable outflow). A well-presented answer applied this information to the
recognition criteria to conclude that no liability was required at the reporting date.
Whilst not explicitly mentioned in the requirement, it is expected that candidates
should then apply the IAS 37 decision tree to further consider whether disclosure of
a contingent liability is needed (or whether the outcome is remote). This was often
discussed in answers, although a surprising number of candidates confused
contingent liabilities with provisions, and disclosure with recognition. Even when
successfully concluding that a contingent liability existed, answers sometimes
incorrectly proposed it would be recognised as a liability in the statement of financial
position.

Where candidates considered the offset issues relating to a successful insurance

claim, they often failed to identify the insurance claim as a separate issue from the
implications of the accident.

(b) Discuss the acceptability of Fernanda Co’s decisions, in the consolidated

financial statements:
(i) to disclose a contingent liability for the estimated cost of redeeming
the put options
(4 marks)

Part (b)(i) related to put options in a business combination. Candidates were

required to discuss the acceptability of disclosing a contingent liability for the cost of
redeeming put options.

Examiner’s report – SBR March/June 2023 9

Good answers began with a definition of financial instruments (the title of this exhibit)
to consider whether the put options meet the definition of a financial liability.

Candidates who picked up that the scenario stated that the company “would be
obliged” to purchase the shares if the options were exercised by another party, often
gained full marks, provided they then explained why (the obligation is under the
control of another party) and how this should be recognised (at the present value of
the redemption amount).

IAS 32 is regularly examined at this level, however a surprising number of answers

either ignored this part of the question or failed to identify the obligation and the
subsequent impact on the financial statements, instead incorrectly agreeing with the
accounting treatment taken by the company.

(b) Discuss the acceptability of Fernanda Co’s decisions, in the consolidated

financial statements:
(ii) to record the non-redeemable preference shares as equity rather
than a compound financial instrument.
(6 marks)

Part (b)(ii) The requirement here related to a complex financial instrument. The
scenario describes how a “fixed cash dividend” was payable, and that the company
argues that compliance with IAS 32 “would conflict with” the Conceptual Framework.
The majority of answers correctly explained how the preference dividend
represented, in part, an obligation to transfer cash flows which created a financial
liability, with the equity element being the residual part of the share issue. However,
very few candidates discussed whether the remote chance that a Conceptual
Framework override could apply here or what disclosure requirements would arise
should such treatment take place.

(c) In accordance with IAS 7 Statement of Cash Flows:

- explain the importance of and the distinction between classification of
cash flows from investing activities and cash flows from financing activities;
- outline the circumstances where cash flows may be reported on a net
basis; and
- discuss the issues with Fernanda Co’s treatment of the cash flows for
the year ended 31 December 20X7.
(8 marks)

Part (c) comprised three short requirements relating to IAS 7. The first two did not
require reference to the related exhibit but questioned the candidate's knowledge
and understanding of the uses of cash flow classifications and rules about reporting
on a net basis. Answers to these first two requirements should be relatively
straightforward at this level. The third requirement raised more challenging
application aspects relating to the accounting treatment described in the exhibit.
Candidates may have picked up on the fact that this third requirement applies the
knowledge relating to the first two requirements (classification and reporting on a net
basis) and could use this to help present their answer to the third requirement.

Examiner’s report – SBR March/June 2023 10

In the first bullet requirement, candidates were asked to explain the importance and
distinction of cash flow classifications (investing and financing activities). A surprising
number of answers were limited to rather simplistic statements that investing cash
flows related to the investing part of the business and financing cash flows to
business financing. Better answers supported this with appropriate examples, and
further marks were earned where answers were expanded to describe the
importance of investing and financing activities to an entity, in terms of capital
expenditure commitments and overall funding and its sources.

In the second bullet requirement, candidates were asked to outline when cash flows
can be reported on a net basis. Answers were varied, with a surprising number of
candidates not answering this section. Where answered, candidates often provided
only one circumstance in which cash flows can be netted off.

In the third bullet requirement, candidates needed to consider the exhibit and discuss
the issues relating to the company’s treatment of cash flows for the reporting period.
Well-presented answers explained how an existing loan to a now disposed
subsidiary would no longer be eliminated on consolidation. This cannot be recorded
as a cash flow, and so should not be included in investing activities (the exhibit
states there was no cash movement on the loan during the year).

A second issue relating to the incorrect netting of cash inflow from the subsidiary
disposal with a cash outflow to acquire another subsidiary was better answered.
However, weaker answers failed to spot the implications of the cash held by the
disposed subsidiary, which should be netted against consideration received to
present the net cash inflow on disposal.

Examiner’s report – SBR March/June 2023 11

Question 4 – Eloa Co

A common theme of the examiner’s report from previous sittings relating to question
4 is that this is often the final question attempted. Candidates with weak time
management may fail to allocate the appropriate time to plan and write their answer
to their final question and struggle to earn sufficient marks to gain a pass on this
question. The marking team saw evidence of this again in answers to this question.

A relatively high number of submissions were noted as providing no answer for one
(or more) parts to the question. Candidates risk losing out on the 2 professional
marks awarded in question four if requirements are not attempted.

Candidates who are taking this examination should be mindful that it is much easier
to gain the first marks from a new question (or part of a question) than the final
(higher level) marks in another question in which they have overallocated their time.

Allow yourself time to think, plan and answer each question to increase your
opportunity to earn the most marks. Be strict with your time and use the mark
allocation as an indication of the time to spend. Translating marks into minutes and
noting the time by which each part of a question should be completed is good exam
technique. Within this time, set aside a few minutes to identify what is required and
plan your answer to ensure you keep on track and make the most of your time
allocation on question. If you don’t answer all parts of a question, you are more likely
to struggle to pass it.

(a)(i) Using exhibit 1 only, discuss, in accordance with IFRS 8 Operating

Segments, whether the four divisions owned by Eloa Co should be classified
as operating segments.

(a)(ii) Using exhibits 1 and 2, determine, in accordance with IFRS 8:

- whether the four divisions owned by Eloa Co should be identified as
separate reportable segments; and
- whether it is necessary or possible for any of the divisions to be combined
into a single reportable segment for Eloa Co.
(9 marks)

Part (a) of this question comprised two requirements (i) and (ii) which together
combined 9 marks.

Generally, part (a)(i) was well-answered, particularly where the candidate’s answer
presented knowledge first, and then applied that knowledge to the scenario.
Candidates should carefully review the scenario description, as marks might be
available for discussing specific issues raised in the narrative. In this case, Eloa Co
has not disclosed segment information on the basis that this “might affect its
competitive position and be misleading.” Whilst relatively few answers considered
this, those that commented on how IFRS Accounting Standards are designed to
provide information that is transparent, useful and not misleading would gain a mark.
Likewise, credit would be given for an explanation on how Eloa Co, being a listed
entity, should comply with IFRS 8 and make appropriate disclosures on operating
segments.

Examiner’s report – SBR March/June 2023 12

As with any question asking for a discussion on an accounting treatment under IFRS
Accounting Standards, an answer should begin with the candidate’s relevant
knowledge. In this case, the discussion should first outline IFRS 8’s definition of an
operating segment, as this would then be applied to determine whether each division
meets that definition. It may be tempting to leap to a conclusion without first
considering the attributes of an operating segment; but without first identifying these
attributes, the discussion may be limited. Marks are therefore likely to be lost without
this discussion as it is key to the requirement (which is to “discuss”).

A good answer first describes the attributes of an operating segment: that its
activities incur expenses and generate revenue, for which discrete financial
information is available which are regularly reviewed by the chief operating decision
maker (CODM). Candidates should have noted, when reading through the scenario,
how one division sells 90% of production to the other three divisions. This should be
commented upon, although some answers overlooked it. Even if you are not sure if
this should be included as an operating segment, a discussion of whether the CODM
would value such information (in terms of a vertically integrated business) may well
lead you to the correct conclusion. The discussion should also consider the
implications of this division operating overseas to the CODM and, more generally,
the user of the financial statements. Separate disclosure of this division is likely to
help users to better assess its performance and significance to the group.

Weaker answers to part a(i) merely copied and pasted chunks of the exhibit
information, without adding any substance or comments to their answer, before
concluding. This approach scores few, if any, marks as it fails to meet the
requirement of a discussion. Furthermore, some answers struggled to distinguish
between defining an operating segment and determining which segments are
reportable (the requirement for part (a)(ii)).

In part (a)(ii), most candidates correctly outlined the reportable criteria under IFRS 8,
although some answers merely referred to the “10% rules” (relating to sales, net
assets and profit) and some answers seemed confused about how to apply the “75%
rule” (relating to total revenue reported by operating segments). Calculations and
conclusions for part a(ii) were, on the whole, correctly reached provided the right
rules were applied. Those who described the reportable criteria, including
aggregation of divisions, applied the criteria to the scenario and scored very well on
this part. Many produced a table with calculations to support their conclusions.

(b) Discuss how the investment in Ganic Co should be accounted for in the
consolidated financial statements of Eloa Group and discuss whether Ganic
Co can be classified as an operating segment.
(7 marks)

Part (b) required a discussion on how to account for a joint venture in the group
financial statements and whether it can be classified as an operating segment.
Candidates who had a good understanding of IAS 28 Investment in Associates and
Joint Ventures generally answered this well. As with most requirements, the best
answers were divided into a display of knowledge of IAS 28 and then an application
of this knowledge based on the information from the scenario, leading to a
conclusion. Candidates familiar with the concept of joint control and joint
arrangement came to the right conclusion, although some incorrectly suggested that
it was an associate.

Examiner’s report – SBR March/June 2023 13

Candidates should review the scenario for descriptions that flag the arrangement to
be a joint venture. All key decisions require a unanimous vote all three shareholders.
Each venturer owns their share of the net assets. Weaker answers seemed
confused by the implications of the option to purchase a further 5% of the other two
venturers in the future. Many answers failed to discuss how control would not be
achieved if the option was exercised, as shareholding would only rise from 33% to
43%, still below 50%.

Marks were often missed by failing to address the issue of whether the venture
should be classed as an operating segment. Where this was discussed, it tended to
be very brief, and conclusions were often incorrect. It is important that candidates
attempt all parts of the requirement to maximise opportunities for marks. In this case,
a good answer would quickly apply the operating segment characteristics (from ai) to
this case. The aspect that candidates tended to struggle with was whether joint
control might influence the determination of an operating segment. Even where
candidates were unsure of this, a discussion on the fact that the joint venture’s
activities incur expenses and generate revenue, whose discrete financial information
is regularly reviewed by the CODM would earn marks.

(c) Segmental reporting provides information about an entity’s operations which

enables users of financial reports to assess and make informed decisions on the
true position and performance of an entity with diversified segments.

Explain why segmental information is important to investors.

Note: You do not need to refer to any exhibit when answering part (c).
(7 marks)

Professional marks will be awarded in part (c) for clarity and quality of the
explanation of the importance of segmental information to investors.
(2 marks)

Part (c) was a general requirement, without the need to refer to exhibits, to explain
why segmental information is important to investors. Candidates often scored well in
this part, provided their focus was on how segment information addresses the needs
of the investor. The question provided some guidance by referencing the need for
investors to make “informed decisions” and citing an entity with “diversified
segments.”

Answers often generated some good points, provided the focus remained on the
investor’s needs. Where this was done, candidates were able to achieve the two
professional marks (in which the guidance specifically mentions the importance of
segmental reporting “to investors”). Weaker candidates overlooked the investor
focus requirement, either expanding their answer to wider stakeholders’ needs, or
considering only the perspective of management.

Part (c) amounted to a total of 9 marks including the professional marks, and
candidates should be allocating the same amount of time to this answer as they do
to part (a). However, some answers were provided in brief bullet point format, which

Examiner’s report – SBR March/June 2023 14

indicated a lack of time management. Since there is no need to refer to an exhibit,
candidates could have answered this part first had they felt this would have aided
their time management.

Examiner’s report – SBR March/June 2023 15