Differences with UK GAAP

Question 1

Consolidation SFP Subsidary

Measurement of NCI

Answer 1

only method is proportionate (share of NA) method

Question 2

Consolidation SFP Subsidary

Goodwill

Answer 2

Goodwill amortised for max 10 years

Acquisition cost inc in consideration (not an expense)

Negative goodwill = negative asset and amortized (not gain on purchase)

Question 3

Consolidation SPL

Answer 3

Amortisation expense

Question 4

Consolidation SFP Associate

Goodwill

Answer 4

Goodwill amortised for max 10 years

Need separate working

Question 5

Discontinued operations

Answer 5

no HFS category

only discontinued operations if disposal

Presentation: separate column for discontinued operation line by line

Question 6

Government grant

Answer 6

Performance model - recognise income when conditions met (if no conditions, when income recieved)

Accrual model - grant relate to revenue/assets

Grants related to revenue - recgonised as income in period to which cost is related to

Grants related to asset - recognised over UEL

Question 7

Intangible assets

Answer 7

Development expenditure can be capitalised or expensed

No intangible asset has UEL more than 10 years

Question 8

Lease

Answer 8

1. Finance lease
   dr fixed asset, cr lease liability
   charge depreciation on fixed asset
2. Operating lease
   recognise lease payment in p or l

Question 9

Revenue recognition

Answer 9

UK - transfer of risk and reward
IFRS - transfer of control

UK - reliable measuring of economic benefits
IFRS - five step approach