Hi, hopefully you can stop me feeling like I am going mad!
I'm sitting the SCS in November and I'm currently going through past sittings and mapping out answers as I would in the exam.
I've just come across May 2017 - Variant 3 - Question 2 - regarding derivatives (apparently). Its presents 3 figures (cash flow hedge reserve, revenue and cost of sales) of 3 competitors over 2 years and asks you to comment on the extent and effectiveness of them using hedge accounting.
The question is unbelievable vague and poor in my opinion, and I struggled to think of a quality response given the lack of information provided.
However this got even worse when I went to look at the answer provided by CIMA, it appears to invent conclusions that 2/3 companies are using hedge accounting (no idea at all how it gets to this), states nothing about judging effectiveness or extent (as there is no way to judge this from the data given) but does talk about sourcing and expansion production (for some unknown reason)
The reason I am now concerned is if something similar comes up in November, I will have no clue how to answer it, as if I had written the model answer provided by CIMA in an exam I would have assumed I'd failed miserably.
Can anybody shed any light on this question? am I missing something obvious? does the answer make sense to anybody?