[P2-D2]

Hi,

A question like this is designed to deliberately catch students out. Your understanding of using the shorter of the lease period and useful life is correct to depreciate the ROU asset but there is a catch with the lease period.

As there is the option to extend the lease by 2 years for the nominal rental then we assume that we would do this as it makes economic sense. The lease period is therefore now 7 years (5 + 2) and so the shorter is the 6 year useful life.

Thanks.

[P2-D2]

You will if you plan out the studies and practice past exam papers. If you get stuck on anything then please ask on here.

Thanks.

[P2-D2]

Hi,

The syllabus hasn’t changed much in those years. The changes are to revenue, leases and presentation of financial statements.

Thanks.

[P2-D2]

Hi,

No the class notes and videos will give you everything that you need.

Thanks

[P2-D2]

Hi,

Under IFRS 16 we no longer have finance leases or operating lease for a lessee A contract that gives rise to a lease will recognise a right-of-use asset and lease liability. The lessee can opt to expense the rentals if short term or low value.

The specifics of what you mention in your scenario are beyond the scope of FR and more suited to SBR.

Thanks.

[P2-D2]

Hi,

I can only assume that the FV gain of 3,000 is an adjustment that has been processed from some other additional information in the question that I can’t see from what you’ve included above. We do not see the FV gain on acquisition included in the NCI calculations. Could it be that since the acquisition date there has been another gain in the FV of the asset? If so then this is what is being adjusted for.

Thanks

[P2-D2]

Hi,

Again, you are thinking of this from an audit perspective and this isn’t really relevant to the FR exam.

Thanks,

[P2-D2]

Hi,

This is more of an audit issue where we need to look at the use of judgement in the amounts included in the accounts. It might be that we have used an expert for the figure, or it might have been something that has been calculated based on experience and past costs incurred.

In the FR exam, we are just given the figure and then need to discount it.

Thanks

[P2-D2]

You need to include the numbers as required, which is usually in 000s in the exam so you should be fine.

[P2-D2]

Hi,

The adjustment for the intra-group interest is one done on consolidation, i.e. in the group accounts. Hence the information in BPP’s materials is correct. We do not adjust the individual accounts of the parent or subsidiary. This is done in a similar way to when we adjust for intra-group trading, where we adjust the revenue and cost of sales of the group.

As the adjustment is a group adjustment and no adjustment to the individual accounts, the NCI is 30% of the 1,300,000. We do not need to make any adjustment for the 400,000 intra-group interest.

Thanks.

[P2-D2]

Yes, the class notes reflect the current syllabus. Good luck with the studying. Thanks.

[P2-D2]

The class notes are but the videos still require some small bits of work. Thanks.

[P2-D2]

Hi,

The class notes are updated. There is still work to do on the videos but it wouldn’t cause you any major issues.

Thanks

[P2-D2]

Hi,

The gain/loss on disposal would likely be in other operating income/expenses and would need adjusting. It wouldn’t appear in the investing or financing section, where if it did then it would not require adjusting.

Thanks

[P2-D2]

Hi Edward,

When a financial asset is sold the gain/loss is recognised through profit or loss. It does not matter how it has been initially classified.

The previously recognised gains in OCI are not reclassified to the profit or loss but are transferred to retained earnings as a reserve transfer in the SOCIE.

Thanks

[P2-D2]

I’d always look to make your answer as professional in appearance as possible. That said, I wouldn’t be thinking about putting anything in bold. Thanks.

[P2-D2]

Hi,

Thanks for your wonderful message, you have made our day. Congratulations on such an excellent result too. You just need to keep the knowledge gained as you progress to studying SBR in the near future. If you can do this then you will have no problem when it comes to passing SBR. Good luck with the remaining exams, although I don’t think you’ll be needing and luck at all.

Thanks

[P2-D2]

I don’t work full solutions to questions. You need to work it yourself in full, compare to the actual answer and then ask on any areas where you do not understand how they got to the answer. Thanks.

[P2-D2]

Glad to hear that you are not crazy. It looks like an error in the answer as the remaining useful life is 45 years. Thanks

[P2-D2]

Hi,

Is there a question on the above post? I can help if you let me know where you are struggling.

Thanks

[P2-D2]

Hi,

Is there a question that you have that I can answer please? I can only see a full exam style question and nothing else. Let me know what you are struggling with and I can help.

Thanks

[P2-D2]

Good point. I believe that it should be in current liabilities as it is redeemable in less than 12 months.

[P2-D2]

Hi,

Good question. It is due to the reason behind the purchase being for investment purposes and to make it equivalent to the treatment of a purchase of shares (another type of investment). If we decide to invest our money in property as opposed to buying shares then we should have the same method of accounting to aid the users of accounts. Both measured at FV with gains/losses to profit or loss.

Hope that helps.

Thanks

[P2-D2]

Hi,

Good question. It is due to the reason behind the purchase being for investment purposes and to make it equivalent to the treatment of a purchase of shares (another type of investment). If we decide to invest our money in property as opposed to buying shares then we should have the same method of accounting to aid the users of accounts. Both measured at FV with gains/losses to profit or loss.

Hope that helps.

Thanks

[P2-D2]

We would still value it at its fair value, which will take account of the likelihood of it being paid.

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