[mcgruber]

Not a bad paper. Would have passed if it was paper exam. Found CBE much more difficult to find way through all the different pages and worksheets.

[mcgruber]

@geologist81 said:
Question 1:
7pts, why is the replacement cost of 17 mil not a good fv for the building ?

This is IFRS3 FV measurements, non-financial assets FV are based on highest and best use if the conditions, that it must be financially and legally feasable, are met, which it is.
The market value of the building, for residential use, was 24 mil and also demolition plus permit costs of 1 mil. I did include this to come to a FV of 25 mil, but I was not fully sure if I had to include the 1 mil in the FV ??

I see several people have an impairment of 30 mil but I thought the RA and CV was for the whole company included the building, I might have misread the question.
CV = 106
RA=100 so impairment of 6 from which 4 for an asset so goodwill impaired by 2. Does anyone also has these numbers ? FV- 1.6 goes to RE and 0.4 to NCI. Proport shares, 2 goes to RE.

The SBP covered by IFRS 2, if there is an acquisition without obligation to pay the SBP, than is considered as SBP, if obligation to pay, than it is considered as a FV consideration for the acquisition. Problem here is that the old SBP, that the parent company is obliged to pay, is replaced by another one for the employees of the subsidiary. So here some part could be IFRS 2 and the other IFRS 3. FV of old SBP =15 mil. When making the calculation of the new SBP, I come to a total cost 19.2 mil without discounting. As the new one is bigger, the old SBP of 15 mil is dealt under IFRS2 and not FV consideration. Here it is also not clear cut, maybe the new SBP is considered obliged to pay and than 19.2 has to go in FV consideration, not sure.

Question 2:
– Advances to receivables: This is an advance for some future sales of goods. Under IFRS15 Revenues, the sale cannot be recognised and so the advance goes into liabilities
-Pref shares to exchange for ordinary shares or cash. Pref shares are considered as debts so this is equivalent to a convertible loan. The loan fails the test of “fixed for fixed”payment as part is equity and the other part liability.
-deferred tax- only to recognise if there is probable future profits.
-ethical part ok

Question 3:
-3 years license + 5% royalties:
to spread the revenue over 3 years. so by recognising the 7% shareholding we get this at Y/E: 1/3 FV 4-5 mil goes to P/L, 2/3 FV 4-5 mil goes in a liability account.

-Cryptocurrencies cost 3mil and FV of 4 mil and Building cost of 6 and FV of 10
The cryptocurrency is an intangibles asset, see technical articles. The cryptos has been sold at cost so it means a loss of 1 mil for Guidance. There was no information about the selling price of the building so I assumed it was sold at FV and so Guidance had a gain of 4 mil. Total gain 3 mil for Guidance.

Question 4: I missed the biggest part I have also 38% and 17%; the first part of the question about an evaluation of the ROE. There is a technical article Perf Measures dealing with it. The ROE is a good tool but has limitations, Perf measures are not covered by IFRS and so there is no standards on it so the calculation of it could be subject to interpretations, this lack of transparency is also a lack of comparability. I didn’t answer to the rest of the question.

I calculated impairment in Q1 the same as you and split between P and NCI

For the FV of the land do is it legally feasible if there was no planning permission granted?

[mcgruber]

@arm2250 said:
One of me lectures stated need 30 out of 50 for part a but after looking at part b probably need 50 out of 50

I had no idea the framework changed for pensions

I’m the exact same. However I might get away with getting 48 out of 50 for section A!

[mcgruber]

Nightmare exam. Section A was ok. Section B a disaster.

I never came across the majority of section B.

[mcgruber]

@kevinnite said:
The conflict of interest you refer to was it not being auditor of clients in dispute?

There must have been, I missed that both companies were clients somehow. I could not see that in the scenario, damn

[mcgruber]

@ltgorman said:
I think it was okay.. But I find it is so hard to tell with Audit!

Did anyone have questions regarding substantive procedures for income (charity), loans for non current liability, and have to state if the management did not include 270k provision how would it be treated in the audit report?

If so, what did you put in your answers?!

I had the same questions, for the provision I said it was material so we would modify the report and insert a basis for qualified opinion paragraph explaining the reason for the modified report and the effects on the financial statements. The opinion paragraph would be qualified except for.

For substantive procedures I wont say my answer as I would rather not think about substantive procedures for the rest of my life.

What did you write for the conflict of interest question? I couldn’t find any conflict of interest in the case provided at all

[mcgruber]

Hi guys,
Any 2016 F6 Irish variant available for sale?

Thanks

[Author]

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