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Sir what if the air conditioners are of insignificant amount (compared to the new store they are of very less value) wld we still capitalise ? On wht basis do we decide whether to capitalize or not ??
yes sir thts wht i wanted to know…….. in the exam can i point tht out saying” there should hv been a entry in the other comprehensive income this shows a possible lack of effective controls” or something along those lines. control risk might be higher than initially thought
sir it would be wrong just to point out mistakes without showing how its a mms or audit risks …..isnt it? so writing “shows a possible lack of effective controls” is crucial ?
sir by now u must be tired answering my doubts i hv asked a lot of questions and there are more i am sorry!
1st question– more of a f8 ques. there has been fraud by sales ppl making false sales claim the answer says reconcile the sales per the sales comission claims to the sales ledger control account
through this quest can u tell me difference btw sales account and a sales control account…..if the entry passed itself is wrong wont he sales ledger control acccount also show incoorect amounts??
last question——oak–oak properties were re-valued its given and also its shown in the sofp as revaluation reserve but nothing in the income statement at all…………..the kit answer doesnt point it out can i do it ??
my frnd told me its bccaus they asked audit risks not material misstatements in the question……..hes wrong isnt he ? he’s like only if MMS were asked cld u hv brought this point out
yes sir i forgot about the discontinued part……staying with ifrs 5 question bluebell 12/08
the question says eight properties were sold under the agreement((15 yrs). bluebell recieves an annual financial return based on the profit. at the end of the contract bluebell has the option to purchase it back…….in the question the profit on disposal is included under other operating income……………….NOW BY IFRS5 shldnt this be disclosed seperately and not under other operating income??continuing with this question—— ANSWER–it might be a sale and repurchase transaction…so is given if it is a sale and repurchase transaction then finance cost might not hv been included
why shld we include finance cost tht other company will be paying us for using our asset they are the ones to include finance cost not us ??
yes sir got it thanks a ton I hv one more question
we are planning the audit of financial statements….the group sold of a subsidary 2-3 months before the year end
the answer says—-“it is possible it is a disposal group of assets and a discontinued operation as per ifrs 5″…. but when we hv sold it Well before the yr end why show it seperately………ifrs 5 is used when u hv an intention to sell within the nxt yr…..why cant we show it normally as a gain on sale and being a large figure we show it as a seperate item??sir can u throw more light on the first question……i understood the major distortion part but the rest not
and in the income statement provisions will come under other epenses??