[Hamsi]

Thank you sir.
I will follow your advice in the exam.

[Hamsi]

Apologies sir,

According to BPP

a,b,c- Interpretation Committee

d- IASB

b- is also kind of IASB since they involve in the development of discussion papers and Exposure draft .IASB liaison members work with national standard setters to promote convergence of IFRS standards.

My concern is where should I categorise b and d (IFRS interpretation committee or IASB)

Thanks

[Hamsi]

Hi Sir,
This is a valuable note for students like me who failed to understand the question.
Thank you so much.

[Hamsi]

Hi sir,
Same doubt

Interest payment (note (i)) DB 2,400
Given in the trial balance.

(i) Triage Co issued 400,000 $100 6% convertible loan notes on 1 April 20X5. Interest is paid annually in arrears on 31 March each year. The loans can be converted to equity shares on the basis of 20 shares for each $100 loan note on 31 March 20X8 or redeemed at par for cash on the same date. An equivalent loan without the conversion rights would have required an interest rate of 8%.
The present value of $1 receivable at the end of each year, based on discount rates of 6% and 8%, are:

6% 8%

End of year 10.94 0.93

End of year 20.89 0.86

End of year 30.84 0.79

Answer

6%convertible loan notes
The convertible loan notes are a compound financial instrument having a debt and an equity component which must both be quantified and accounted for separately:

Year ended 31March outflow 8% present value
$’000 $’000
20X6 2,400 0·93 2,232
20X7 2,400 0·86 2,064
20X8 42,400 0·79 33,496

Debt component 37,792
Equity component(=balance) 2,208
–––––––
Proceeds of issue 40,000
–––––––
The finance cost will be $3,023,000 (37,792×8%) and the carrying amount of the loan notes at 31 March 20X6 will be $38,415,000 (37,792+(3,023–2,400))

In the question they haven’t mentioned that the annual payment was transferred to finance cost. But in the the trial balance the note1 is given.

I deducted the amount given in trial balance and debited to Finance cost (3023-2400)= 632

But the answer is DB finance cost 3023 in adjusted profit for the year

[Hamsi]

Thank you sir, It is worth noting.

[Hamsi]

Hi sir,
This is from 1st question of FR practice Exam 1 in ACCA CEB platform.

[Hamsi]

Hi sir,
This is from BPP notes page 299.
I took a picture of the notes but couldn’t find a way to post it.

Apologies.

[Hamsi]

Thank you so much sir.
I was confused by the figures misprinted in their given answer without checking the final output.
It was really helpful.

[Hamsi]

Thank you so much for your detailed explanation sir.
I guess I haven’t done much exercise on revaluation model of NCA held for sale.

[Hamsi]

Thank you for this explanation.
I understood the dividend part.
But the profit for the year is $7500, how we are arriving to the figure of post acquisition $7000.
Could you kindly explain me that part please?

[Author]

Posts