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@denny09 said:
Quick Quetion. For question 4 part B how much should the company put in the provision for??Probable values my friend;
129m * 40% + 140m * 60%.
I even added 5% cuz i thought it would be right to reflect the uncertainty and risk of cost increase since the proposed amendments are aimed to reflect this in the new IAS 37.
Hope that answers your question. I hope to score like 3-4 marks on that part!because the FV adjustment existed at the date of acquisition and was pending the final sign off it should have been included as part of the fair value of the net assets at acquisition giving you 6 goodwill.
Lol nope. There’s a question in the BPP kit with the same adjustment. You may wish to pick it up and see for yourself.
@mafazkhan said:
close enough.. i did at 300..:D,…. and was the goodwill 6 or 9?Definitely 9. The results of the PPE valuation of second sub. were not to be included.
The depreciation instead should’ve been charged to P&L and the final value of 2.7m taken to SOFP@gwen2000ie said:
did any get a negative fv adjustment on the second sub? I had bk value of
osc plus 15m ret e at acq =25
fvna of 26m and another 3m fv adj on land to add on as it was within 12 months. but to 29mbut obviously when i went to take 25-29 i was getting a negative fv adj even though they said excess, i was trying to see what id done wrong but i dont know, i had to stick in a figure in to make a positive figure but lost buckets of time on it, and q2!! i had one full 25 mark question and written on q one to do with 15 mins to go 🙁
You were not supposed to add the provisional valuation of $3m. It should have been taken to R.E (the depreciation of 6 months from 5 years) and the final value of 2.7m shuda been added to the SOFP. Also, did you add the fair value of equity interest already purchased in 09?
Easiest paper in the history of P2.
I had to read the paper 2 times to actually take in how easy it was. I was expecting a much harder exam and I knew I had to rely on Q1 to help me pass.Balanced the SOFP without much trouble, the only technical adjustment was the Impairment of PPE and the transfer to reserves. This, though, was already done once in June 2010 (SOCI question), so the adjustment wasn’t so hard for me.
The written parts for IFRS 9 was a bit hard. I knew the rules but i just felt there wasn’t much to write for 9 marks.
The 6 marks for Sale and repurchase transaction were a GIFT!Didn’t do Q2.
Q3 was fun. 11 marks for Impairment and Deferred Tax asset rules. And the application to the scenario. Not hard at all if you read it twice.
Part b) was hard, I didn’t really know what the issue was. Since it was just 7 marks, I decided I would discuss the classification of debt instruments and if the entity cud classify it as FVTPL (in this case, it could)
Part c) was EASY 5 marks. The shares had the characteristics of Preference shares and had to be accounted for as a liability. Just described how and why, the obligations and stuff. Also recommended Amortised cost as the method to be used for any unpaid but declared dividends.Chose Q4. I so KNEWW this was coming. I was expecting a discursive of IAS 17 ED or the IAS 37 ED.
The first 9 marks were easy, just basic textbook knowledge with regards to provision creation and measurement.
Second part was also good. The proposals were small in number and i gave a few examples of how these proposals would look like under the revised standard (rename standard, expected values, conditional/unconditional obligation and such)Part c, again not so sure about. Just calculated the expected values and created a liability, hope to get 3 if not more marks for calculations and discussion of treatment under current guidance and proposed amendment!
@gudluck said:
i guess not enough information was provided to assess whether opinion should have been just qualify or adverse.Err, you can use your common sense to see if the misstatement only related to one class or several amounts. In this case, it related SOLELY to the SOFP and the effect was ONLY on liabilities. This means the misstatement was not pervasive (where the misstatement present a VERY different picture and affect alot of transactions/classes).
This, I think, should have been sufficient to show you that the adverse opinion provided was TOO harsh and an ‘except for’ opinion was more appropriate.
tanveer3 said what is the answer to q5-b audit report?
There were 3 broad issues as i remember
1 — The opinion expressed should have been an except for modification and not an adverse opinion because the misstatement was not so pervasive that it would have rendered the statements useless.
2 — The structure was wrong. The basis for opinion paragraph should be ABOVE the opinion paragraph. The opinion paragraph is below the basis for opinion paragraph because it is only logical to provide reasons and THEN the opinion and not the other way round.
3 — Wordings. The basis for opinion was worded wrong. It should have been ‘Basis for Adverse opinion’ or ‘Basis for except for opinion’. It should have also quantified the effects of the misstatement (under-statement of liabilities). It should have also referred to the IAS which had not been applied properly (IAS 19 – Employee Benefits in this case).
The line ‘management’s deliberate omission is against IFRS’ should also have not been included.I think this was sufficient for 7 marks 😀
Funny, I didn’t find time management a problem at ALL. Infact, I mismanaged and had like 15 minutes to spare. But maybe that’s cuz of the fact that I couldn’t identify enough misstatement risks in Question 1.
Hoping to pass.
Expect no less than 20 in the first question. Maybe around 15-18 in the second question. Chose question 4 and 5. Expect like 8-12 marks in q4. I thought there wasn’t much to write for ethics. And audit reporting was a TREAT. Expect atleast 10-13 there.@sanjarbek said:
Q2. New Plant contructed by Keystone :
$000
Labour 4,000
Materials 3,000
Factory Overhead 3,000
(4000 x 75%) ______
Total Cost 10,000
Mark-Up 4,000
(@ 40 %) ______
Selling Price 14,000
Depreciation
(@25 % red, bal) (1,400)
(14,000×25%x6/12) ______
CV to date 12,600Note: “Selling Price” represents a Fair Value. This is another way of saying Market Value.
It wasn’t a MARGIN of 40%, It was mark up of 40%, so it’s 10,000,000 *40/140, tahts what ur tryin to say.
You dont add the profit element for self constructed assets. I even studied that for audit and passed it in the last session. There is no way that u add a profit element to self constructed assetIdk how it was time pressured. I finished the first two questions in just 1 hour and 10 mins (both did not balance), but i knew straight away i would gain no less than 20 marks on each question and didnt want to waste time correcting anything. I was surprised i couldnt balance the first question cuz Q1 was a GEM. Straight consolidation.
Also question 2 specifically said teh 15,000 excluded the revaluation gain. So the 8,000 gain had its own tax deduction in comprehensive income.
The examiner provided the ppe additions in the cashflow question which totally threw me off cuz its usually teh only tricky part in it. I couldnt tie this up either but am pretty sure i am nailin atleast 12 if not more, from 19 marks available.
Q4 was a blunder. Thedefinition part was a straight forward answer but the calculation parts i wasnt so sure about
Was very surprised with IFRS 9 coming up in the exam again, as it came as a part of Q2 in June 2011. Question spotting can indeed be a dangerous thing, but luckily i had avoided revising EPS and Construction contracts instead of IFRS 9. The 10 marks were again, a gift. No complicated calculations. No out of the box IASs’ except the 4th question adjustments. I studied myself and this is my first attempt. I had barely 3 months to study and I am confident i’ll pass (:
I used the 3,200 of the fuel cost and advised that he could make a gift aid donation of the same amount and it would be a gross donation of 4,000 (3,200 * 100/80)
And showed the tax savings cuz of the rate band extension.Also, the occupational pension scheme DOES NOT extend rate band. It’s an allowable deduction in the employment income part. Both by the employer and employee i think.
Even though i was pretty well prepared for it, and the exam wasn’t really hard, it was very different