[mileyshanna]

Hi Professor,

I just discovered the explanation from BPP Text. It really helps.
“Circumstances that give rise to deductible temporary differences: Unrealised profits resulting from intra-group transactions are eliminated from the carrying amount of assets, such as inventory or property, plant or equipment, but no equivalent adjustment is made for tax purposes.”

Sorry for bothering you.

[mileyshanna]

Thanks, I got it.

[mileyshanna]

Hi sir, I got it. Do not bother to think about it.

[mileyshanna]

Hi sir,
I am wondering whether it means zero tolerance versus materiality.
Materiality is where there is a significant or sufficient risk so for example checking for a difference of at least 5% in circumstances of stock is material to know.
But with zero tolerance for example if a director of a company is found to steal $500 although this might be well below the 5% level, it is significant.

[mileyshanna]

Hi sir,
I got it. Although the risk is high for due diligence, because of the value. The level of assurance is low because all auditors are doing is assessing whether the company is keeping true and fair accounts. The due diligence that an acquirer will be carrying out is to assess whether the company is worth buying or not. This is not the same as auditing the company.

[mileyshanna]

Thanks a lot. It makes sense.

[mileyshanna]

Sorry, sir. I got it. Don’t bother to think.

[mileyshanna]

Hi sir, I got it. Don’t bother to think.

[mileyshanna]

Thanks a lot.

[mileyshanna]

I GOT IT

[mileyshanna]

since IAS 16 says:

If a revaluation results in an increase in value, it should be credited to other comprehensive income and accumulated in equity under the heading “revaluation surplus” unless it represents the reversal of a revaluation decrease of the same asset previously recognised as an expense, in which case it should be recognised in profit or loss.

[mileyshanna]

sorry, I got it.

[mileyshanna]

Sorry sir,

I got it.

[mileyshanna]

Hi sir,

Besides, I am wondering the step to calculate the $8m deferred tax in working 3.

[mileyshanna]

Hi sir,

Is 14.3m just calculated by 19*9/12?

[mileyshanna]

Hi sir,

In working 1, I am wondering why Ginny’s investment income (w3?becomes 14.3m.

[mileyshanna]

Hi Sir,
I got it. Sorry for bothering you. I thought I can delete the post, but clearly I cannot.

[mileyshanna]

Hi tutor,
Thanks a lot. I have watched the video and read the notes one month ago. I will review it.
Many thanks.

[mileyshanna]

Compared to 2013-June-Q2a, which also covers five forces theory.
I wonder where they come from, cuz I cannot get these from the question.

“The products purchased from suppliers represent a significant fraction of the buyer’s cost. Buying is price sensitive and the company is likely to spend a great deal of effort trying to ensure the best terms of supply.
Purchasing companies are fewer and larger than potential suppliers. Suppliers may have alternative customers but their scope is limited. In contrast, the buying companies have many smaller supplying companies competing for their business.”

Thanks in advance.

[mileyshanna]

Dear sir,
I wonder the reason why …. will be missing. The detail answer is as follows. The answer is in the last paragraph of Q1 c.

” However, the stimulus experienced by a company operating in a country where there are internationally competitive suppliers or related industries, or where there is a great degree of rivalry between competitors, will be missing. ”

Thanks in advance.

[mileyshanna]

Dear sir,
I have trouble understanding the third element-related and supporting industries of Porter’s diamond. Does it mean there is no related and supporting industries currently, but they are in the development? Quite confused about the answer.

“The third element of the diamond is related and supporting industries. This concerns the presence in the nation of supplier industries or related industries which are internationally competitive. There is some evidence of this in the scenario (MachineShop already buy from a Ceeland supplier), although the government (see later) is encouraging the production of light engineering and so related, supporting industries may eventually develop in Ceeland. ”

Thanks in advance

[mileyshanna]

Dear sir,
I have trouble understanding the second theory-demand factors of Porter’s diamond. I just wonder the reason why the home market usually has a disproportionate impact on a firm’s ability to perceive and interpret buyer needs. Even though there is one reason, I cannot follow it due to my poor understanding. Sorry about that. Thank in advance.

Porter argues that the home market usually has a disproportionate impact on a firm’s ability to perceive and interpret buyer needs. One of the reasons for this is the attention the home market requires. Product development usually takes place in the home market. Pride and ego focus attention on succeeding in this market. Pressure from buyers is immediate and the proximity and cultural similarity of these buyers mean that their needs are well understood. MachineShop

[mileyshanna]

Dear sir,
I just wonder how can we know that labour costs remain high in Elsidor regarding to economic perspective?

As we all know ” By 2010 NMS employed 75 full-time employees in a new, purpose-built factory and office unit. These employees were a mixture of technically qualified engineers, working in research and development (R&D), factory staff manufacturing and assembling products and a small sales and service support team”

“NMS produces components in a relatively prosperous country where there is significant legislation defining maximum work hours and minimum wage rates.”

However, it does not mean the labour cost remain high. Is it because Elsidor is a prosperous developed nation?

Thanks in advance.

[mileyshanna]

THANKS A LOT.

[mileyshanna]

Thanks a lot. I got it.

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