Strategic Business Reporting · May 2026

In these questions the statement said goodwill was not impaired, or an impairment of ₦1.2 billion was given and charged to the group profit and shared with non-controlling interests under the full goodwill method. The detail section explains why that charge is permanent.

The solution remeasures the 30% from a carrying amount of ₦5.7bn to a fair value of ₦6.5bn, recognises a gain of ₦0.8bn in profit or loss, and consolidates only the six months after control. Worked examples 1, 2 and 7 show the layouts.

Both group questions start with the acquisition accounting in this topic: the cost, the fair value adjustments and goodwill with the NCI at fair value. The marking guides give separate marks for each goodwill working and each fair value adjustment. Worked examples 1 to 3 show the layouts.

The marking guide gives marks for the presentation, revenue, cost of sales, the gain on the previously held interest, tax, post-acquisition profits, unrealised profit, the equipment transfer, intra-group loan interest, the management charge, goodwill impairment, profit and the NCI. Worked example 5 lists the adjustments. See worked example 1 for the NCI layout.

The group tax charge is reduced by deferred tax at 30% on unrealised profit: ₦120m × 30% = ₦36m on the bandwidth sale and ₦640m × 30% = ₦192m on the equipment. Worked example 4 shows the buyer’s rate rule behind this. There is no stand-alone IAS 12 question in the latest Pathfinders. Note: ICAN’s notes say a change in the acquirer’s own deferred tax asset is part of the business combination accounting, which is slightly different from ours. IAS 12 says it is recognised in the period but not in goodwill.

The solution carries the 30% at cost plus the share of profit (₦5.7bn) and then remeasures it to fair value on gaining control, with a gain of ₦0.8bn. Worked examples 1 to 4 show how the carrying amount is built up. The next topic covers the step acquisition.

The solution reduces the group tax charge by deferred tax at 30% on the unrealised profit on the bandwidth sale (₦36m) and on the equipment transfer (₦192m). There is no stand-alone IAS 12 question in the November 2025 or May 2026 Pathfinders, and November 2025 Question 1 says to ignore deferred tax. Worked examples 2 to 5 show the layout for the calculation.

No past question in the two diets asks for the contents of IAS 1 on its own. The rules still decide how every statement in the compulsory Section A question is laid out: the classification of assets and liabilities, the line items, the allocation of profit between owners and non-controlling interests and the notes. The marking guides give separate marks for presentation of the statement.

The marking guides give separate marks for presenting the statement correctly. The same discipline of listing items in the right place and in the right order, applied to IFRS 18, is what the subtotals section trains.

The marking guide gives 4 marks for the ethical issues, 2 for applying International Financial Reporting Standard 15, 2 for the ICAN principles and 2 for the professional action. The worked example in this topic follows that split. Examiners reported that candidates could not apply the principles to the facts.

The marking guide gives 2 marks for applying IFRS 15 and 2 each for the ethical principles and professional action. The suggested solution says revenue is recognised only as each milestone is completed, over time, and not in advance. The over-time criteria and the technique section of this topic give you the IFRS 15 argument to use.

The same IFRS 15 logic applies when a manager is pressed to book revenue early: revenue follows control and performance, and cash or political pressure does not change that. The technique section of the previous topic and the arrangements section here give the rule to quote.

Both were reports to a named user that used ratios and comment together. The same layout applies here: formula, number, reason and consequence. Worked examples 3 and 4 show the style.

Both questions ask for a report to a named user. ICAN\u2019s solutions calculate ratios such as ROCE, margins and working capital days for each period and then explain the movements. Worked examples 1 to 8 show the layouts.

The marking guide gives 2 marks for the meaning of related party transactions and 6 marks for the guiding principles, rules and regulations. The suggested solution lists the arm’s length principle, disclosure, shareholder approval by special resolution, audit committee approval and substance over form. The Nigeria section follows that list and notes which items are outside IAS 24 itself. Performance on this question was above average, and candidates struggled to apply the standard to practical situations.

The marking guide gives 1 mark for the hierarchy, 5 for the investment property, 5 for the equipment and 1 for the conclusion. Worked example 7 follows the solution. Note: the Pathfinder solution is slightly different from ours on the level of the equipment and on the description of Level 3 inputs.

The marking guide gives 5 marks to the investment property exhibit. The solution classifies the measurement as unobservable inputs (the lowest level of the fair value hierarchy), prefers the 14% risk-adjusted discount rate to 12% because the local market is declining, and discloses the technique, inputs, sensitivity and a reconciliation. The measurement section of this topic gives you the same logic.

Part (a) carries 4 marks for the net liability, 2 for the cost in profit or loss and 2 for remeasurements. Part (b) carries 4 marks each for the accounting treatment of past service cost, the ethical issues and the effect on users. Worked example 6 follows part (a). Note: the Pathfinder solution is slightly different from ours on the net liability (₦15m shown, ₦35m correct) and on which of the ₦10m and ₦25m is current service cost.

The CFO wanted to spread a past service cost to make profits “more stable and attractive to investors”, which is income smoothing. The marking guide gives 4 marks for the IAS 19 treatment, 4 for the ethical issues under the ICAN Code and 4 for the effect on users. The incentives, ethics and red flag sections of this topic give you the language for the second and third parts.

Question 4(b)(ii) expects integrity, objectivity, professional competence and due care, professional behaviour and confidentiality applied to the CFO’s suggestion. Question 5(b) expects five consequences for the person, the employer and the profession. Do not mix these with the consequences of breaking accounting standards.

The marking guide gives 10 marks for ten correct points. The solution names the loss of a true and fair view, loss of investor confidence and a higher cost of capital, delisting, regulatory sanction by the FRC under the FRC Act as amended, restatement, a modified audit opinion and personal liability for directors under CAMA 2020. All of these layers are covered in the Nigeria section and the worked example of this topic. Examiners noted that candidates mixed up the consequences of non-compliance with the consequences of unethical behaviour, which is covered in the next topic.

The solutions to these questions list consequences such as loss of investor confidence and distorted decisions. A misleading performance measure has the same effects, which is why MPMs are now reconciled and audited. Use the MPM section for the explanation.

The marking guide gives 1 mark each for facts, standard, application, accounting treatment and conclusion. The solution says that because the company disputes the claim with a credible defence, an outflow is possible but not probable, so no provision is made and a contingent liability is disclosed, with legal advice deciding whether it later becomes probable or remote. Worked example 2 and practice question 13(a) follow that answer.

The latest Pathfinder diets have no lessor question. The leases question (7(b)) tests the lessee. Study this topic for classification, dealer leases and sale and leaseback, which ICAN practice material covers.

The marking guide gives 1 mark each for the facts, the standard, its application, the accounting treatment and the conclusion. Note: the Pathfinder solution is slightly different from ours. It treats the loss as an onerous contract provision of ₦22.5m. IFRS 16 says that once a lease has started, the lessee already holds a lease liability, so the loss is reflected by impairing the right-of-use asset. State the ₦22.5m as ICAN does if the question treats it as onerous.

The suggested solution calls the lease an onerous contract and provides for ₦22.5 million. This topic teaches the IFRS 16 position (impair the right-of-use asset because the lease liability is already recognised) and explains how to handle the difference in the exam. See worked example 5 and its note.

The marking guide gives 1 mark each for the facts, the applicable standard, its application, the accounting treatment and the conclusion. The solution says IAS 38 prohibits internally generated brands, a certified valuation does not overcome it, the valuation and research costs are expensed and only an acquired brand can be recognised. Worked example 4 and practice question 13 follow that answer.

The brand name question needs the asset definition first and the intangible asset rules second. The Framework test of a present economic resource that is controlled is the starting point. No question in the two diets asks for the list of qualitative characteristics on its own, but they are used as supporting points in many answers.

The solution tests whether an internally generated brand can be recognised. Start with the asset definition, then explain that recognition needs a faithful measure, then name the intangible asset standard. The measurement uncertainty point in the recognition section is the idea behind that answer.