[P2-D2]

Hi,

It is being removed from cost of sales (an expense in profit or loss), so we add back the profit to the expense to remove it.

Remember that the removal is a debit entry too.

Thanks

[P2-D2]

Yes. Updates will be needed for September onwards with IFRS18 taking effect.

[P2-D2]

Hi,

FVTPL gains/losses go through profit or loss and as it is a gain in this instance it has been taken through finance income.

Thanks

[P2-D2]

Hi,

You need to be specific about what you need help with in the question. I can’t just answer it in full for you. Happy to help when you let me know.

Thanks

[P2-D2]

Hi,

It is a bit of an old question and we would unlikely see something like it currently but the difference comes from the difference between the sales and purchases figure plus the difference between the receivables and payables figure.

Thanks

[P2-D2]

Hi,

There won’t be that many adjustments to be made, so you can use most of the given figures in the question to calculate the ratios.

Where an adjustment is required that impacts the ratio then there will be continuity marks available if you get the adjustment wrong but the ratio correct using your figures.

Likewise with the anysis itself where you get marks based on what you have calculated.

Thanks

[P2-D2]

I think it is the balancing figure having posted each of the individual entries. Thanks.

[P2-D2]

I’ll do my best but I can’t make any promises, sorry.

[P2-D2]

Hi,

We are looking at the value in the SFP, so at a point in time. This means that at this point in time we would have had influence over the profit from this year and the previous year when we acquired it too, hence accumulating the profits from each year.

Don’t get confused with the SPL which is where we look at the profits for that particular year only, not an accumulation of them.

Thanks

[P2-D2]

Hi,

Partnerships are not included on the FR syllabus so you do not need to worry about the above for this paper.

Thanks

[P2-D2]

Glad we’ve helper you out. Sorry to say we can’t do the same for your football club 😉

The reason why we apply the amortisation to the 15,000 and not the 19,500 is because we will have impaired the asset down to the 15,000 and so this is the updated/new carrying value to which we would then apply the amortisation to.

Thanks

[P2-D2]

Hi,

You need to at least attempt the question first before I can offer any help/advice.

Thanks

[P2-D2]

Hi,

We have a 50% complete asset on a 5m project so the asset before any adjustments is 2.5 m. We then deduct the amounts invoiced as this is then shown as a receivable. We deduct the cash received from the receivable and not the contract asset.

Thanks

[P2-D2]

Hi,

You need to amortised the cost for another six months as the impairment review took place part way through the year. So, there is an additional 1.5m to reduce the carrying value by as we have a cost of 30m and a 10 year life, so 3m p.a.

The CV at the review date is then 19.5 (30-9-1.5l meaning that the intangi le.is impaired down to the 15,000.

This value is then amortised over the 3 year remaining life for the last six months the of the year. You should then get your answer to a tough question.

Thanks

[P2-D2]

Hi,

If a specific asset is impaired then it should be done first as we cannot have it sat in the books then being unimpaired because we have taken it to goodwill first.

Thanks

[P2-D2]

Hi,

I think you’d need to check that the gains on IP are taxable under UK corporation tax. It could be that they are not taxable. Possibly worth checking with the tax tutor.

Thanks

[P2-D2]

Hi,

This is beyond the scope of what is in the FR exam and so isn’t something that you would need to address.

Thanks

[P2-D2]

Yes, I believe that you are correct and we will be updating this for the September 2025 sitting onwards.

Thanks

[P2-D2]

Notes and videos are valid for both March and June 2025. From September 2025 there will be IFRS18 that replaces IAS1 and so we will be required to update the notes and videos.

Thanks

[P2-D2]

Think about it the other way round. Why would it be capitalised? It isn’t doing anything in relation to enhancing the asset or generating economic benefit, so therefore would be expensed.

Thanks

[P2-D2]

Hi,

Under the revaluation model the losses would go through OCI if there has been a previous revaluation upwards and so OCI reserves available to use. If there are no OCI reserves to utilise then the loss would go through profit or loss as is seen in the example.

Thanks

[P2-D2]

Hi,

The key is that at the date of change we need the most up to date value, so we need to record any increase regardless of whether it has always been held under the cost model. As the revaluation is then done under IAS16 then we follow the principles there, i.e. gains through OCI.

From a business perspective, most property is held under the revaluation model and not the cost model, so we would rarely encounter the scenario where the property is held under the cost model.

Thanks

[P2-D2]

Hi,

I think that this question will be better posted in the SBR forum, but even then I don’t think it is on the syllabus.

Thanks

[P2-D2]

Hi,

I think that you’ve posted in the wrong forum. Is this not a tax question?

Thanks

[P2-D2]

Hi,

BPP’s answer is correct. We need to provide for the $0.02 per barrel as we are contractually obliged to pay this each time we extract a barrel of oil. Having extracted 150M barrels, we need to provide 150M x $0.02 to get the total cost for the year. However the $0.02 is the cost at the start of the year and so we need to grow this to the value at the reporting date by the 8% figure.

Hope that helps clear it up.

Thanks

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