General notes: Semester 1 Flashcards
1
Q
General notes:
A
- Current cost is an entry cost and FV is an exit value (IFRS 13)
- If costs are expensed there is no FEB (Asset is derecognised ) therefore, subject to impairment
- Do not recognize executors contracts until one party has performed
- Having a right doesn’t mean you have an asset. Meet all requirements of CFM
- Do not need output to have a business you need inputs and a substantive process
- If there is no business, it is an asset acquisition
- Obligating event gives right to present obligation
- If something is not recorded IAS 8
- Always mention the tax implications unless they tell you that TAX is NA even in discussions
- Provisions are not measured at historical cost
- Question discount rates (Risk in company and what would be your expectation)
Exam technique:
- In a critically evaluate question mention what must be done per the standard
- Mention that there is no evidence that ….. ‘above things have been done’
Statement of P/L
-Revenue: P+S- sales from inter-company sales
-Less foreign exchange loss
+Foreign exchange gain
2
Q
IAS 10
A
- Identification of IFRS 10
- Event after reporting period (Favorable or unfavorable)_occurred between the reporting date and the date FS are authorized for issue
- Issue is whether condition occurred at year end
- Evaluation is based on facts and circumstances specific to company
- Re-measurement of A/L at reporting date is N/A
- Disclosure
- Consider GC principles since FS are prepared on a GC principle
- If dividends to holder of equity instrument are declared after reporting date, an enterprise should not recognize those dividends as reporting date
3
Q
Inventory IAS 2
A
Do not capitalize:
- Interest to purchase raw materials
- Storage costs
- Excess capacity
4
Q
IAS 40
A
- Investment property CA
=CA at BoY+ Acquisitions+subsequent expenditure capitalised+ FV remeasure gain
=CA at year end
5
Q
IAS 19
A
Cost to company/ total days * allowed days py *% those that took it * remaining EE %
Dr Short term EE benefits
Cr Leave pay accrual if paid bank
Termination benefits
DR Accrual termination benefit
Cr Bank
Cr Termination benefit
PBT () Increase in accrual leave pay