[Maria]

The exam was fairly tricky and hard !!! Studies a lot but exam pressure, stress and hard English terms used knocked me down, think will sit in June again…
Question 1 CF was tricky and long did not know where to start, knew the template for consolidated CF so did all the basics, got 1.5 for DT calculation, added back 4 borrowing expense to be capitalized in opr CF, and also included as PPE addition in investing activities, also deducted 1 from 11 interest paid. overall CF was hard and tricky.
Q1 b was really confusing just described that cash equivalents are highly liquid assets like current account, treasury bills, which can be easily converted in to cash without significant loss. first loan was deffo term deposit. second one was more confusing as the company wanted to keep it flexible, however notice period was 21 days, so I think this is not highly liquid. not sure of course.
Q2 was more or less ok ish, there was revenue recognition, so talked about ias18 how and when it should be recognized and that in case of service contracts it should be recognized in accordance with stage of the completion, and when service constitutes unknown number of operations it should be accrued evenly over the period.
the question about lease was ok ish again talked about substance over form about the fact that company need to carefully consider what type of lease it is, in case of sales in finance lease back it will be no sales recorded as there is no pass of rewords and risks, and for opr lease it should derecognize asset and recognize sales. the excess of price over FV is additional loan.
q3 I tried to read it but after 2 sentences went into panic attack, it was way tooo hard and confusing and I was too stressed so tried to do q4, tho did not realize it was q on current issues, well wrote everything about accounting policies and changes in estimates.
the reasons for change in accounting policy could be change in ias, change in regulations, or tha fact that change will result in better and fairer presentation.
The difficulties will be restatement of the prior period figures, think of IFRS 39 and 9, before there were 4 types of FA, now after they removed FA available for sale, there will be difficulties with recognition and measurement. in applying accounting policies management uses accounting estimates so the fair presentation depends on their subjective judgement. Hence if it is material can effect economic decisions of the users of FS.
the numeric calculations in 4th were fairly easy.
change in depr. method is change in accounting estimate so adjust only current year not restate opening.
there was another accounting error, which should be treated as prior period adjustment, restating opening RE and adjusting current year p/l for the current year error.
the double accrual was again overstatement of liabilities and understatement of financial results should be restated for opening re balance as prior period adjustment.
well these are my subjective thought sure there are loads of mistakes

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