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March 31, 2016 at 6:04 am
video is not playing its showing access denied please recommend what to do.
March 31, 2016 at 9:52 pm
use another browser, – see support page for help
April 4, 2016 at 8:48 am
I have done everything but still its showing access denied
Jin Hua says
February 8, 2016 at 2:37 am
How to get the figure 2803 for net presentation?why can’t we take the figure 2289 from the SOFP??
December 6, 2015 at 10:21 pm
hello, Is there anyone writing Dip in IFRS? are there any exam tips?
October 3, 2015 at 1:59 pm
Can any one help me here?
Am getting confused on how to get the figures in the reconciliation (Net column)
June 3, 2015 at 3:48 am
I wonder whether the answer of depreciation 2632 at the answer sheet is wrong. How long should the FL depreciate, 4 years or 5 years?
June 3, 2015 at 4:04 am
5 years – it’s the whole of 2010 plus 4 years from 1 January, 2011
June 4, 2015 at 12:12 am
January 31, 2016 at 3:31 pm
This lecture states Deprec is 4 years = term of lease but answers on page 243 states 5 years
I think there are 5 financial years 2010 to 2014 ?
Which is correct ?
November 8, 2014 at 9:26 am
Please assist on the calculation in the “net presentation” for Example 1.
Muhammad Sarosh says
September 1, 2014 at 4:28 am
I can’t find deffered tax, the hardest topic of P2 anywhere?
September 1, 2014 at 6:17 am
There’s no lecture on it but there are course notes. You say it’s the hardest topic in P2 but that is just your opinion. I don’t think it’s the hardest topic in P2, but that’s my opinion!
As a topic, deferred tax is so rarely asked in a P2 exam that it did not / does not feature in my mind as a topic worth spending a lot of time on. If it were to appear in question 1, it may be worth 4 – 6 marks. If it came up in 2 or 3 it’s only going to be a part question and is avaoidable anyway by not attempting that question
The lectures are recorded over a 5 day P2 course and that time constraint does not allow the luxury of lecturing the entire syllabus. Deferred tax did not merit any greater attention than “Read the course notes and get a general understanding of the topic”
November 13, 2013 at 2:12 pm
Yearly payment Interest Principal payment Principal Balance Accrual interest Total Liability
13,161.00 1,839.00 15,000.00
1 3000 3,000 10,161.00 1,839.00 12,000.00
2 3000 711.27 2,289 7,872.27 1,127.73 9,000.00
3 3000 551.06 2,449 5,423.33 576.67 6,000.00
4 3000 379.63 2,620 2,802.96 197.04 3,000.00
5 3000 196.21 2,804 (0.83) 0.83 –
15,000 1,838 13,162
The above table is to spread out the interest charge of $1,839 for the whole term loan Then there is no interest charge recorded Profit Loss statement on 31/10/2010 and balance sheet should shows Liability part as below
current liability : $3000
Accrual interest ($711)
non current liability; $9000
Accrual interest; ($1,128)
Which one is correct?? Please help me
November 13, 2013 at 5:04 pm
Heaven knows what you’re doing in the complicated table at the start of your post! At the end of the first year and the first real instalment is due to be paid “tomorrow”, the interest accrual is 711 and the capital current liability is 2,289
Does that sort it out for you?
November 14, 2013 at 1:11 pm
Thanks for your promptly reply. Sorry for messy figure in my post, I did the table by using excel. However when I copied here, all format has been gone.
It is still vague to me. If the interest accrual is 711 and the capital current liability is 2,289 at 31/12/2010. Then Profit and Loss for 2010 FY shouldn’t claim 711 interest charge as per the answer in the lecture note. Am I correct?
November 14, 2013 at 2:33 pm
Why not? What’s the double entry to record an accrual? Dr Expenses 711 Credit Liabilities? 711
The expense gets written off to Statement of Income, the Liability is shown as such on the Statement of Financial Position
November 14, 2013 at 3:19 pm
Oh i see now. I was getting confused with Australian accounting treatment for Chattel Mortgage/hire purchase
Thanks for your time and patience with me :).
November 14, 2013 at 3:26 pm
November 14, 2013 at 3:40 pm
Mike, btw I couldn’t locate your lecture of IFRS 2 – Share based payment. Is it still in processing?
November 14, 2013 at 4:22 pm
I don’t think there is one on IFRS 2
OIf you can’t find it on the site, it doesn’t exist or, put another way, if it exists, it will be on the site somewhere
November 13, 2013 at 1:42 pm
@MikeLittle: Your lecture is very appreciated and helping a lot for us with ACCA exam/. It is much easier to understand the IAS/IFRS for those who do self study like me. The exam date is coming, so i wish the best for all students.
Regarding to example No 1, I would clarify with you about the calculation of the interest charge of $711. With my understand,
the lease assets had PV of $13,161 at 01/10/2010
but total liability was $3,000 x 5 = $15,000 (total amounts need to be paid by lessee to lessor from 01/10/2010 to 31/12/2004)
So total accrual interest charge for the whole term loan would be; 15,000 – 13,161 = 1,839, it means total interest charge for each year is : $1,839 :5 = 368
If interest charge per year is $711, then times 5 years, it is more than $1,839.
Could you clarify with me? I am getting confusing with this.
Again, thanks so much for your help
November 13, 2013 at 4:34 pm
What you are trying to do is alocate interest on a straight line basis. That’s ok for sme’s or where the amounts involved are immaterial but it’s an awful method and doe not fairly represent the way in which interest is accrued.
13,161 is the cost of the asset and 3,000 is paid straight away. So, in effect, only 10,161 is being “borrowed”. At 7% calculated on the reducing balance basis, you’ll find that the interest in the first year is in fact 711 …. but let me know if you’re still struggling
November 14, 2013 at 1:12 pm
Totally agree, it is using in practice for SME:. Thanks
November 14, 2013 at 2:35 pm
It may well be – but it’s still an awfully simplistic way of allocating finance lease interest.
Fortunately, in the near future, if IASB carries its exposure draft through to final IFRS, we shall not be faced with the problems of determining whether a lease is finance or operating
June 25, 2013 at 6:47 pm
In the solution the interest rate is 7 percent where it is calculated by using 10161/3000 to give you 3.387 it then says that taking this at 4 years should give you 7 percent please tell me how to calculate this as i have tried on my financial calculator and did not come right Thanks
November 13, 2013 at 1:25 pm
if you use financial calculator, please try CMPD button, then enter :
n = 4
PMT = 3000
PV = -13161 +3000= -10161
Then it will give you i% = 7
October 18, 2012 at 9:54 am
Hi Mike Little,
In this Lease “example 1” video, the depreciation is charged for 4 years but in the notes (answer pg. 218) it is charging depreciation for 5 years.
Which one is to be correct?
Thank you in advance
October 18, 2012 at 11:04 am
I don’t have the notes available and I cannot face the prospect of listening to myself on the recording.
The correct period is “over the shorter time of the lease term and the estimated useful life of the asset”
Clearly I have made a mistake in either the recording or in the notes but hopefully this “explanation” should help you to determine which is the correct period over which the asset should be depreciated.
Is that enough?
( and thank you for pointing out the inconsistency / error! )
October 18, 2012 at 11:51 am
@MikeLittle, I agree with the recording – Depreciation: 4 years.
Thank you once again.
October 18, 2012 at 3:06 pm
@zainy52, You’re welcome, and thanks again for pointing it out to me
June 1, 2012 at 11:29 pm
in the cash flow statement you are saying we have 3000 under Financing activities. Here you mean the payment of the deposit and not the 1st repayment – am I correct?
November 13, 2013 at 4:29 pm
March 15, 2016 at 8:17 pm
But 711 is the interest for the whole year. Is it right to note interest piad which is included in 3000 as finance activity?
May 30, 2012 at 6:18 pm
i think what On Kei CHUNG is trying to say is in the downloadable answers, the useful life is still like this one 4 years. despite this, the depreciation is calculated dividing by 5, when in this video mike divides by 4. What is the correct method to do it? thanks in advance.
April 7, 2012 at 2:16 pm
In example one why the prof use different years in his calculations, he started with 1.1.05 to 1.1.09 does him means 2005-2009?is there any meaning? because the qn shows that it is from jan 2010…
April 7, 2012 at 3:27 pm
It’s possible that notes have updated dates
But the lecture uses notes before the update
May 21, 2012 at 3:37 am
@admin, Please check this to clarify. Notes that I have (recently downloaded) says lease commences Jan 2011, while video says 2005.
Video was probably done with previously updated notes.
May 21, 2012 at 7:12 am
video says 2005? that’s an error. opentuition did not exist in 2005.. video is probably older (2011 or 2010) than the notes, but still OK
On Kei CHUNG says
November 2, 2011 at 4:25 pm
just want to check if the lease term on example 1 should be 5 years? (with 4 annual payment + deposit) as shown in the answer?
mary Cawley says
November 5, 2011 at 6:28 pm
The question says its 4 annual payments commencing 1Jan 2011. The deposit of 3000 on 1Jan 2010 is not part of the annual payments but reduces the amount ‘borrowed’ from 13161 to 10161.Therefore liability is actually 10161 and the payments of 3000 effectively start Jan 2011. I dont know if this makes sense to you. Am not sure, that is how I interpreted Question
October 27, 2011 at 11:42 pm
why was d initial instalment of 3000 nt charged to d income stmt..
November 5, 2011 at 6:16 pm
Because it is like a deposit. In substance it is like borrowing 13161-3000= 10161. I dont know if Mr Little can explain it better if this does not help
February 23, 2011 at 5:29 am
sorry 1 had 43 fail i will attend lectures this time/ congrat to those who passed
September 9, 2011 at 6:56 am
did u self studied that you got 43 ??
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