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Hi sir
In part (b)
1) in examiner answer
Correspondance w bmc is dated after the end of reporting period
from where they indicate this?
2)
I though wip is part of inventory. So i answered it like it should be capitalized bcoz its develp costs as part of the cost of the assets.Not included it as inventory?
Plz clarify my misunderstanding of this issue and how the right treatement?
3) the Loss of BMC as a customer will not be mentioned in the company’s integrated report, as the finance director does not consider it significant enough to warrant discussion.
Should the any loss of a customer be reported in integrated report?
Thanks
1) It is inferred from the sentence in the scenario “As part of our subsequent events review, inspection of correspondence ….”
2) Under IFRS 15, contract balances are shown separately.
3) If you are not familiar with the contents of an integrated report please refer to Chapter 30 of the SBR notes.
Hi sir
I didnt get the point for my question (2)
I appreciate providing clear Explaination
Thanks
Under IFRS 15 any WIP for a customer would be shown as a contract receivable (if it includes a profit element it will not be at cost). Since in this case the costs of the WIP cannot be recovered from the customer, BMC, this receivable would be written off.
The WIP is not inventory that can be capitalised because the $350k represents DESIGN costs (i.e. intangible).
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