1. Profile photo of Swati says

    Hi Sir,

    Have a quick ques. Its a part of consolidation ques adjustment (June 2007)

    -> At 1 April 2006 Beta was engaged in legal action against a supplier in respect of damages caused by the supply of faulty products. Beta was claiming damages of $5 million. In the middle of March 2006 the customer had offered an out of court settlement of $3 million and Beta’s lawyers advised that this was a fair offer given the likelihood of success in court. However Beta refused the offer, took the case to court, and subsequently won the case. The directors of Beta had not recognised any receivable in respect of the case in the balance sheet at 31 March 2006 because the claim was a contingent asset. The directors of Alpha considered that the fair value
    of the contingent asset at 1 April 2006 was $3 million.

    I dont understand that when we are not supposed to show Contingent Assets in the B/S, then why are we considering it while calculation Goodwill? Why are we doing the FV adjustment for this contingent asset? Just want to know the reason.


  2. avatar says

    I was just wondering if these lectures are the updated and suitable for December’13 exams ? Since I can see few standards not covered in the lectures like Share Based Payments though covered in notes .

    Could you please give me an update for the same very soon.
    Thanks for your continuing support !

    • Profile photo of MikeLittle says

      We simply do not have the personal time available to continue to have updates on all the IFRS / IAS. Share based payments are, in my humble opinion, adequately covered in the notes. If there is no up-to-date lecture covering a (any) topic, it’s because I felt that it is / was an area relatively easily covered by the students themselves. I’m not sure that I personally find IFRS2 particularly mind-bending so it is probably not audio lectured for that reason.

      However, BEWARE! The examiner COULD find relatively obscure points within any standard to test the preparedness of even the best prepared student

    • Profile photo of MikeLittle says

      @kamshizo, At 3.44, I say “Next year, the provision should be 40,000” We already have 36,000 in the provision account. So now we need a further 4,000 to bring it to 40,000.

      Ok, ok, I should have said “Say, next year, the provision should be 40,000”

  3. Profile photo of patama says

    Hi In Reply to 7suleo11 question:
    please can someone please explain how he arrived at 8% by 200 and 2% BY 1000.

    The question says 90% suffer no default therefore 10% of sale must suffer faults.
    now split the 10% faulty microwave between minor and major defects.
    In the question it state that 80% suffer minor fault therefore 80%x 10%= 8% so the 2% must relate to major faults.

    now use the percentage to multiply to estimated cost of repair e,g
    8%x $200,000

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