ACCA SBR: What are differences between ACCA SBR and P2?

Updated: Sep 5, 2020

Since September 2018, ACCA Strategic Business Reporting (SBR) has been replaced P2 in the professional exam towards ACCA qualification. I find no significant change in the knowledge and syllabus required between two exams.

However, SBR overall pass rates are ranged between 47% and 49% which is lower than P2 by around 4 percentage points. So, what’s the problem?

The key is there is different exam approach between P2 and SBR. It is also highlighted by Catherine Edwards, ACCA's director of skills and assessment, in PQ Magazine March 2019. To help you understand what you need to know in SBR exam, I show you what are the differences between P2 and SBR with examples to help you easily approach your SBR exam.

What does SBR examiner say on the exam performance?

I trust many of you will read through ACCA P2 past exam papers in your preparation of SBR exam. It is appreciated that you are working hard towards the exam by reviewing relevant materials. However, you should know P2 papers are only for reference which are not the same as what you will do in SBR.

Examiner points out in his December 2018 report saying the reason of poor performance in SBR –

Some candidates appeared to answer the questions by showing the accounting entries without any discussion of the principles that support them. It appeared as though some candidates had not read the guidance on the ACCA website as they seemed to expect an examination in the style of P2 Corporate Reporting (SBR’s predecessor). Some candidates also spent a disproportionate amount of time on question 1 which seemed to indicate that they had not made the transition from P2 to SBR.

There are few messages from examiner here.

First of all, examination style is different in SBR from P2. Next, a lot of time spent on question 1, the group accounting question, is not wise in time management. It implies not only time management but also what you put in your answer. Lastly, discussion of the principles in your working or calculation is necessary.

In the following, I show you what is SBR exam approach and advise which parts are the focus that you cannot miss in your study.

Exam format

SBR is a three hour and fifteen minutes written exam. It is divided into two sections, A and B. Each section contains two compulsory questions and each section shares 50% of the total marks.

You know it already? Great! But how depth do you know of the exam format and approach?

Section A includes two compulsory scenario-based questions, totalling 50 marks.

Question 1: Will be on group financial statements from Syllabus area D but is also likely some consideration of financial reporting issues from Syllabus area C can be found.

Question 2: Mainly asks for ethical implications and reporting implications of specific events in a given scenario.

Marks for Question 1 are ranged between 30 and 35 and Question 2 marks are from 15 to 20.

Section B comprises two questions (25 marks each), which may be scenario or case-study or essay based and will contain both discursive and computational elements.

Question 3: Based on a modern business scenario and will require the application of accounting standards to those scenarios.

Question 4: Contains any element of the syllabus but is likely to be scenario based and mainly focused on current issues, investor issues or interpretation.

With 195 minutes, some tutors suggest to allocate 1.95 minute per 1 mark. However, I suggest to spend 15 minutes scanning the questions and requirements and planning how to answer so that you have 1.8 minute per 1 mark.

Study approach for exam

Based on examiner’s comments and the exam format mentioned above, your study and practice should follow what are required in SBR exam. As said, the requirements are different from P2 which can be summarized in three areas, namely, group accounting, stakeholder perspective and conceptual framework.

1. Group Accounting –

In SBR exam, Question 1 in Section A is on group accounting but not in the same exam approach as P2. Here are the requirements on group accounting questions extracted from P2 March/June 2016 and SBR December 2018.

P2 March/June 2016 Q1a
P2 March/June 2016 Q1a

From the example shown here, P2 asked for a complete consolidated statement of cash flow. But in SBR exam, it only required the computation of cash generated from operating activities in explanatory note.

In addition, the marks put in computation are significantly different. The computation of cash flow in P2 requirements contributed 35 marks but in SBR, the computation requirement only contributed 12 marks.

With our 1.8 minute per 1 mark rule, you only need to spend 21.6 minutes in cash flow question in SBR exam but if under P2 exam, it’s 63 minutes!

As explained by examiner, some students spent a disproportionate of time in cash flow statement in their SBR exam. You should bear in mind the time allowed for computation is much less than in P2.

However, SBR requires you to explain the nature of the statement and the principles behind its preparation. Therefore, the provision of a numerical answer without any further explanation of the accounting principles behind it will not be sufficient to gain a pass mark.

In SBR December 2018 Q1b and Q1c, both required an explanation to the proposed changes. It shows the discursive elements of the exam take on greater significance.

SBR December 2018 Q1b and Q1c

Some of you may worry about complex consolidated financial statements will be required in SBR exam. Fortunately, SBR examiner has already said complex groups will not be examined in an ACCA publication, Strategic Business Reporting – Examples of a change in approach.

2. Stakeholder perspective –

In P2, exam questions adopted the investor perspective from time to time. But in SBR, a wider group of stakeholders, including investor, will be examined more frequent.

From the published exam papers, examiner asked students to discuss accounting issue from investor perspective. An example from December 2018 paper show how does the examiner require students to do:

Question 4b


With reference to the above information, explain to the investor, the nature of accounting for taxation in financial statements.

Note: Your answer should explain the tax reconciliation, discuss the implications of current and future tax rates, and provide an explanation of accounting for deferred taxation in accordance with relevant IFRS Standards.

(14 marks)

In SBR, as in the workplace, professional accountants need to consider the point of view of investors and other stakeholders. Therefore, the requirements put in question paper will not only ask you accounting standards but also how to analyze, interpret and explain information and transactions to different stakeholders.

For question about investor perspective, the topics which impact on investor decisions could range from capital of an entity, impairment, taxation to fair valuation.

3. Conceptual Framework –

Conceptual Framework is not new in SBR exam. This is an area which has always been seen in P2 exam. The difference between P2 and SBR on Conceptual Framework is the way examiner asks.

In P2, the question asks specifically on the Conceptual Framework. But in SBR, you are required to discuss the consistency between the Framework and IFRS.

Let me explain to you how SBR examiner sets the question so that you know how to prepare for it.

First of all, you should know there are seven judgements in Conceptual Framework which are:

1. Going concern assumption;