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Hi Sir,
BPP Kit – Section A & B Questions:7. Why the option D is correct?
Why “the receivable sold to a finance company (the Finance company has full resources to the company for any losses) should be recognised as an asset”?
Since the receivable already sold, why can the keep it as an asset?15. The answer says “Concept of Physical Capital Mantainence is applied in Cost Accounting. So what’s the “Physical Capital Maintenance”? & What’s the “Finance Capital Maintenance”?
36. In this question, it clearly says “Brand at cost of 30 million”. So it seems Brand is asset (with value). However, in the lecture video, you mention Brand Name cannot be an asset because we cannot measure it reliably (i.e. we cannot measure Adidas’ brand). Besides, on tuition note p.28, it also says Brand cannot be capitalised as it’s internal generated. Are there some conflicts?
*Is Brand belong to Intangible Assets or not? How come the question can say “Brand at cost of 30 million” if it’s not intangible Assets as you mentioned in the videos?
*Are customer list and goodwill Intangible Assets?
38. Why impairment not charged to current Asset?
46. Option C” The carrying amount of an entity’s new assets is lower than the entity’s number of shares in issue multiplied by its share price.=> I think this option “not an indicator of impairment as the asset is lower. We impair when the CV is “higher” than the Recoverable Amount. Why cannot we choose option C as the Question asking “Not an indicator of impairment”?
Thank you very much for your help.
Hi,
7. As there is full recourse it means that factor can still claim anycash not received from our customers. We therefore still have the risks attached to the receivable and will continue to recognise it.
15. Have you watched the video on the website?
36. Internally generated brands cannot be capitalised, but ones that have been acquired will be capitalised at cost, which is what will have happened here.
38. The current assets will relate to inventory (IAS 2) and receivables (IFRS 9) and cash (can’t be impaired) which have their own rules.
46. If the carrying value is more than the market capitalisation then that would indicate an impairment, but that is not the case here as they are lower.
Thanks
Hi Sir,
Thanks for the reply. Really appreciated.As for Q 46. I know it’s not the case here. So that’s why I think it (option C) should be one of the answers because the question is asking “what is “”not”” an indicator of impairment”.
The answer is only option D. So is option C also the answer? Could you please confirm?
Thanks.
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