FSLC exam Flashcards
When asked why something is important maybe relate to the fact in the Framework FI must be fair representation… eg. if we overvalued inventory this would affect COS & GP & NP … not give a true representation etc…
..
PUP - what to watch that i got wrong
Remember need the PROFIT amount.
So if a quarter unsold
Don’t work out COS and then take quarter of that… needs to be quarter of the PROFIT..
Which Profit total goes into SCE retained earnings?
Profit for yr from continued Operations (Ie PAT the shareholder)
Any reval surplus which comes under Other Comprehensive Income which is AFTER Profit for the year from continued operations… with the final total on the SPLOCI
Total comprehensive income for the year.
Remember the OCI doesn’t go into retained earnings because it cand be paid out in dividends so treat it separately on the SCE and in the Equity section of SFP
Task 1 : Watch out for Reducing balance dep’n
in one example I calculated it on the PPE Cost instead of first calculating the CA and THEN the Dep’n on that.. silly
Returns outward on a TB means? (osborne)
Returns to suppliers (deduct from purchases)
Consolidations - what to remember about interco
If subsidiary selling to parent need to watch a PUP amount is going to NCI
Leases bookkeeping
INITIAL RECOGNITION: DR PPE (or ROUA) / CR Lease Liability
DEPRECIATION:
Depn: Dr SPL / Cr PPE: Dep’n charges account
(Then Dr PPE Dep’n charges / Cr PPE Acc Dep’n)
PAYMENTS/ INTEREST:
Pmts: Dr LL / Cr Bank
Int: Dr Finance cost / Cr LL
Cashflow Task 1
what to remember about dividends
These do not get adjusted back in when reconciling PB4tax.
It’s a bit confusing that in the notes you are given an amount for dep’n which you DO adjust back in but also an amount for Dividends paid which DO NOT get adjusted back in.
I THINK this is because dep’n is actually there in the SPL but is hidden … whereas divs are not there, hidden or otherwise
What to remember about Return on Shareholders funds
(Same as Return on Equity)
This is TOTAL equity so SC, SP & RE as well
(not sure if revaluation surplus should be included)
Task 4 … what to remember about putting in calcs?
- Don’t forget to put them in!
- Put them in in FULL
Eg. If calcing a FV in Impairment question and deducting a selling cost … don’t just put the net amount in answer … put in the simple sum as well
Intangible asset in T5 - can capitalise customer list?
No because it can’t really value the benefit
T5 cash flow question… where you’re given a profit fig ‘after deducting’ some notes and the AP AR and INV figs previous and current for adjusting… I know to add back on dep’n, loss on disposal (those are a different part of the cash flow.. investment) but what about £x for payment of non-cash expenses?
Yes add it back on because it’s ‘non-cash’ and anything non-cash needs adjusted out. …
Consolidared FSs
when working out what share have bought and told how many ordinary shares you have bought as well as the SC and RE figures , how to calculate?
Ignore RE & SP RS …
Just work out proportion bought from the SC
eg. bought 150,000 ordinary shares and there is 200,000 SC then you have bought 75% (and so NCI is 25%)
Consolidated FSs
Working out RE …
- Parent RE - 100%
- Subs Post-Acq RE - proportional %
- (Any impairment)
Do NOT include any Revaluation amount here in Consolidated RE… the whole Reval amount gets added to the NCAs in the ASSETS part of the SFP with the Subs ‘share’ of the extra within the NCI amount
Conslidated FSs
SFP
Do you include Revaluation to FV in the Retained Earnings Calc ??
NO !!!
