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If you wish to ask the tutor directly, kindly start a thread on Ask the Tutor Forum. You can access it through this link:
https://opentuition.com/forum/ask-acca-tutor-forums/ask-the-tutor-acca-financial-reporting-fr-exams/
Also, please be a bit clear about which question are you referring to, and specifically which part of the answer you are unable to understand.
It is possible to do TX and PM together in one sitting however, you will need to give sufficient time to each subject and find a balance during preparation.
PM is relatively difficult while TX has a huge syllabus. Both exams require lots of exam practice. If you are a full time student, then i’d suggest to start earlier than March exams (if thats possible). All the necessary resources to pass either exam are available (for free!) on Opentuition.
Good luck.
To everyone expecting results tomorrow, i wish you best of luck. Keep faith in your efforts and how you have performed on the exam day.
We have all gone through this enough times to understand exactly how you all are feeling. The anxiety, stress and the sleeplessness is all part of the process. Keep yourself calm, try to focus on some other stuff, watch a movie, and most importantly, get some sleep.
I hope everyone here receives a pass tomorrow. Once again, best of luck for your results!
If you wish to ask the tutor directly, please start a thread in Ask the Tutor Forums. This forum is primarily designed for students to help each othere.
As explained on page 30 of the lecture notes under the heading “Sale of Plant and Machinery”, the closing balance on a pool (whether general or special rate) is written down to nil only under two situations:
1) the business is being closed, OR
2) the closing balance is 1,000 or belowOther than these two situations, the pool balance is never written off, even if all the assets in the pool are sold.
Hope this helps.
Net Assets = Assets – Liabilities = Equity
In other words, the carrying value of net assets equals to the book value of Equity section of SOFP. Now, the market value of an entity’s total shares must at least equal the book value of total equity balance in SOFP. Generally speaking, the market capitalisation (total issued shares*share price), usually exceeds the book value of equity (Net assets). However, there could be occasions where share price may fall (for eg due to disappointing performance), resulting in reduced market capitalisation.
If this reduction is so significant that the market value of shares falls below the book value of equity in SOFP, then it is an indication that the net assets are overstated. And by net assets we mean total assets are overstated, because liabilities usually remain same. Therefore, a reduction in market capitalisation is an indication of impairment.
Hope this helps.
Hi.
1. I am not sure from where you have got this information. There isn’t any official announcement from ACCA regarding this, so we can safely assume that TX exam will continue to take place in all quarters of 2022.
2. The best approach is to attempt a Strategic Professional exam after passing all Applied Skills exams, as the exam approach is significantly different in either module.
However, you can attempt a SP exam if you have, for example, 1 Applied Skills exam remaining. For this you will have to pay exam fees for both the remaining Applied Skills exam and SP exam you are attempting.I hope this helps.
Hi.
The question you are referring to is been updated, as mentioned by the Tutor in following thread:
https://opentuition.com/topic/chapter-7-exam-preparation-question-2/
Hi.
Its important to memorise IFRS numbers for exam purposes. It will show that you have done your preparation sufficiently and will have a good impression on the checker.
However, if you can’t remember the specific IFRS, you can continue writing your answer by saying, for example, “In accordance with International Financial Reporting Standards, a fair value is an amount agreed to settle a liability in an orderly transaction between willing and able parties”.I hope this helps.
If you wish to ask the tutor directly then kindly start a thread in Ask the Tutor forums. This forum is for students to help each other.
The lease administration costs will presumably be paid for in cash, hence the credit entry will be in cash account.
Hi.
Looking at the substance of the transaction, these shares are a financial liability. It is the shareholder’s right to redeem them whenever they want, not the company’s.
So if they do exercise their right, company will have no escape. It will be legally “obligated to transfer cash” to whoever has redeemed them, which makes it a financial liability.
The fact that no one has redeemed them yet has no impact on the substance of transaction.I hope this helps.
Hi again.
The correct formula for calculation of RE (for FR exam) is:
RE at start of the year (b/f) + Profit for the year – dividends paid = RE at reporting date (c/f)For consolidation questions, you can adjust it to make it appropriate as follows:
RE at acquisition + Post-acquisition profit – dividends paid = RE at reporting dateIn this question, we could adjust the formula and find RE at acquisition.
For exam questions, there are two possible scenarios. Either you will be given ‘RE at acquisition’ date, or you will be given ‘RE at reporting date’ and you will have to go backwards making adjustments for any post-acquisition items to calculate RE at acquisition date, as is the case in this question.
A third possibility is mid-year acquisition, where you’ll be given RE at start of the year and you will have to add profit till the date of acquisition to arrive at RE at acquisition date. But such questions are rare and usually involve CSOPL only.
In regards to the formula you have written, ?revaluation gains are only transferred to RE when the asset (to which it relates) is sold. Until the asset is owned by the entity, revaluation gains cannot be transferred to RE. They will be maintained as a separate reserve under equity.
Good thing is, this is more of an SBR topic than FR and i have not seen any question involving these rules come up in FR exams.I hope this helps.
Hi.
It appears that the question is not fully presented in Kaplan. The original question in Dec 2010 included SOPL for P and S, where the total comprehensive income for S for the year ended 30 Sep 2010 was $3,900,000.
Its a printing mistake. No need to worry too much about it. You will be given all relevant figures in real exam.
I’m assuming your query is in continuance to “Prodigal Co” question that you have asked in last thread. In future, please avoid duplication of threads and continue in the same thread if the query is still not resolved.
From the group’s perspective, there is no change in ownership of NCA (its like taking a sofa from one room to another in your house), so the profit made by P is unrealised.
This addition of PUP has resulted in:1) Group COS understated by $1,000 in CSOPL (Group RE overstated in CSOFP)
2) Group NCA overstated by $1,000 , which has then caused
3) ‘Excess’ depreciation in CSOPL of $200For adjustment of 1) and 2), the entry will be:
Dr Group COS $1,000
Cr Group NCA $1,000If you are preparing CSOFP, then you will simply replace Group COS with Group Retained Earnings. This is because the profit is recorded by P only, so no impact on NCI.
Adjustment of 3) requires following entry:
Dr Group NCA $200
Cr Group COS $200The net impact is that Group NCA decreased by $800 and Group COS increased by $800.
Following additional explanation relates to adjustment 3) only. Do not put too much effort into following explanation unless you are specifically required by question to prepare CSOFP as well.
If you are only preparing CSOFP, then the entry using Group Retained earnings will be slightly different due to the addition of NCI. I’ll try my best to explain it as simply as possible.
The excess depreciation relates to Subsidiary only. We know that any impact on S’s profit will eventually be split between Group’s share of S’s profit and NCI’s share. The effect of reversal of excess depreciation on S’s profit is that it increases the profit by $200.
This increase in profit will eventually be split between Group’s share and NCI’s share, so that Group will receive 75% of it while the remaining will belong to NCI. Hence:
Group’s share $150 (75%)
NCI’s share $50 (25%)So the entry in CSOFP will be:
Dr Group NCA $200
Cr Group Retained Earnings $150
Cr NCI $50Hi.
Please keep in mind that interest is always accrued on an amount that is ‘payable in the future’. How can you charge interest on an amount that will be paid immediately or is already paid?
Initial deposits, whether included in the initial lease liability or otherwise, cannot accrue interest. Therefore they must not be used for calculating interest.
Secondly, an alternate way of identifying which amounts to charge interest on can be identified using present values. Although there is no need to calculate PVs (they will be given in exam), you can still make your own calculation to confirm the proportion of liability that will accrue interest.
In the first example, PVs are calculated for the five annual instalments of $6m only whereas in second example, the amount of $360,200 includes the initial deposit (it is obvious as the total of three annual instalments of $100,000 will be below $360,200 even before discounting).
Therefore in first example, you don’t need to worry about initial deposit amount. In second example, however, you will need to deduct initial deposit to charge interest.I hope that this answers your query.
Hi.
From the answer, it is clear that Administrative expenses are ‘credited’ by $150k and not debited (because there is a reduction of $150k).
Initially, the directors charged $400k to Administrative expenses when estimating insurance provision. It means following entries would have been made:
Dr Administrative expenses $400k
Cr Insurance provision $400kAt the end of the year, it was found that the total amount paid in relation to insurance expenses was only $250k. It shows that the directors overestimated the provision initially, thereby ‘overcharging’ the administrative expenses.
Therefore the excess amount of $150k ($400k-$250k) should be reversed. The required entry will be:
Dr Insurance provision $150k
Cr Administrative expenses $150kAre you clear now?
Hi.
The question clearly states that it is Xtol which is the agent:
“Xtol, acting as agent, is entitled to a commission of 10% of the selling price of these goods.”So Xtol could only record an income amount equal to 10% of the sale made on behalf of Francais. So, when the cash of $20m was received, Xtol could only record commission as its other income while the remaining amount would be a liability (to be transferred to Francais).
Following entries should have been made:
Dr Cash $20m
Cr Other income $2m
Cr Trade payable (Francais) $18mAnd when cash was eventually transferred to Francais, the entry should have been
Dr Trade payable (Francais) $xx
Cr Cash $xxInstead, Xtol recorded the full amount as its own revenue, i.e.
Dr Cash $20m
Cr Revenue $20mand when $15m was remitted to Francais, this was recorded as Cost of Sales i.e.
Dr Cost of Sales $15m
Cr Cash $15mIn summary:
revenue is overstated by $20m
Cost of Sales is overstated by $15m
No entry is made for either Commission income or Trade payable (Francais).I hope you can do the rest of the answer yourself.
Hi.
1) Part (a) of the question requires calculation of goodwill at 1 Jan 20X2 (acquisition). The impairment occurred on the reporting date of 30 Sep 20X2 (9 months after acquisition). The calculation provided in the answer is upto the acquisition date only. If goodwill balance at the reporting date was required, impairment would be included.
2) There is no omission. It is part of the ‘income from associate’ figure in CSOPL. The original figure of $500k is the amount received as a dividend to Viagem.
When we’re preparing group accounts, any associate is accounted for using equity accounting rules under IAS 28, which requires that the group’s right to earnin.gs of associate for the corresponding period must be included in CSOPL.
The group has a right over 40% of associate’s earnings, regardless of how much of it is received as dividends. Therefore the figure of $800k ($2m*40%) is included in CSOPL.
Hope this helps.
Hi.
As posted by BPP’s official twitter account, there was indeed an issue with their site, preventing access to their study hub. Following tweet is about 5 hours ago:
https://twitter.com/BPPGroup/status/1460542489564168195
They have announced that the issue is resolved in the following tweet. If you’re still facing issue, you can contact them on their social media profiles (facebook, instagram, linkedin and twitter).
https://twitter.com/BPPGroup/status/1460547402562158598
I hope this helps.
In future, if you want to ask the tutor directly, please use Ask the Tutor Forums through following link. This forum is primarily designed for students to help one another.
For your query, i believe there must be separate invoices. If the same firm is providing tax services as well as performing audit, then these are two distinct services and will therefore be invoiced separately.
Regardless of the invoicing, you must know that the same group of people who perform audit cannot offer services like tax or corporate valuation. It gives rise to ethical threat of self-review, as same people who calculated tax figures in financial statements will then be reviewing their own workings.
It is standard practice to use separate teams for the said services, along with signing of confidentiality agreements by the team members.Hope this helps.
Hi.
Through this link, you can log in to ACCA practice platform where you can find CBE past exams, specimen exams as well as blank workspace similar to real exam. You can then assign yourself any one of these and start practising questions.
Hope this helps.
