Financial Reporting Flashcards
What are the fundamental characteristics of financial information?
relevance
Faithful representation
What are the enhancing characteristics?
Comparability
timelines
verifiability
Understandability
How do you measure inventories?
The lower of the NRV and the cost
What does cost comprise of ?
all cost purchases, cost of conversion and other costs
What is the NRV?
estimated selling price less the costs of completion and cost to make the sale
How do you allocate fixed production overhead if activity is lower than normal?
unallocated fixed overheads are recognised as an expense.
How do you allocate fixed production overhead if activity is higher than normal?
the amount of fixed production overhead allocated to each unit is decreased
What is goodwill?
the excess when a company pays more then fair value to acquire its stake of a subsidiary
How is goodwill and the good will expense accounted for ?
Good will is a non current asset and good will expense is an expense on the income statement
How is non controlling interest accounted for ?
It is under equity on the sofp and on the income statement you multiply the subsidiaries profit by it
How to you account for intra group sales?
Take it away from revenue and add to cost of sales
Where do you include the impact of depreciation?
You subtract it from the NCA, add it as an admin expense and use it when working out NCI
How do you account for URP?
you add it to cost of sales and as a current asset
How is NCA adjusted
Take away the fair value adjustment and the depreication
Where is cash in transit accounted for
a current asset
