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Where a question requires the adjustment of profits, candidates will be told in the requirements what figure to start their computation with (normally the net profit figure for an unincorporated business, or the profit before taxation figure for a limited company). They will also be told that they should list all of the items referred to in the notes to the question, indicating by the use of zero (0) any items, which do not require adjustment. Please see the end of this article for different wording used in variant papers.

This approach has been adopted so that candidates avoid wasting time, and to help them score full marks.

Previously, candidates sometimes rewrote the entire statement of profit or loss from the question, thus taking more time with their answers than was necessary. This problem should be avoided if candidates are asked to start their computation with a given figure.

There are obviously marks available for adjusting items that require adjustment, but also marks for making no adjustment where an adjustment is unnecessary. For example, in Question 2 from the June 2009 Paper F6 (UK) exam, the following items were included in gifts and donations:

An alternative layout would be to have just one column, and to show deductible items (those making up the figure of £235,260) with brackets.

Where a question requires the adjustment of profits, and candidates are told in the requirement to follow this approach, they will not be able to obtain full marks if the layout/approach suggested here is not followed. However, it will be possible for some credit to be awarded, since markers will be instructed to give some credit where candidates present their answers using explanatory notes but to give no credit where no mention is made of items not requiring adjustment.

Variant papers

The same wording will apply in Paper FTX (SGP) and Paper F6 (VNM), as above in Paper F6 (UK).

The instruction in Paper F6 (SGP) will be included in the supplementary instructions at the start of the paper, and shall be worded as follows: ‘All computations should indicate, by the use of ‘0’, any item of income or expense that is tax exempt, not taxable, or which does not require adjustment, as appropriate.’

The instruction will be slightly different in Paper FTX (MYS) and Paper F6 (MYS). In these papers, candidates will be instructed to indicate, by the use of the word ‘nil’, any item referred to in the question for which no adjustment needs to be made in the computation.

In Paper FTX (LSO), candidates will be told that their answer should list all of the items (income and expenditure) referred to in the question, indicating (by the use of ‘0’) any that are not taxable or not deductible.

Written by a member of the Paper F6 (UK) examining team

Last updated: 10 Aug 2015