[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.

[P2-D2]

Hi,

Time hasn’t permitted for the update of the videos, and I apologise for that. It will happen at some point I promise.

To calculate the operating profit we need to work backwards from the PBIT figure. We adjust the 15,000 for the 180 income and 400 expense, i.e. 15,000 – 180 + 400

I’ll look to update the answer for example 2 to take account of the updated narrative.

Thanks

[P2-D2]

Hi,

The correct answer is the $4.5m as this is the discounted amount of the best estimate of the settlement of the court case.

In relation to any legal fees attached as part of the court case then this will never form part of a provision. A provision is accounting for uncertainty in relation to timings and amounts involved. For the legal fees we know the amounts we will be charged by the lawyers and when it will be paid, therefore it will always be an accrual and not a provision.

Thanks

[P2-D2]

Hi,

The simplest way to remember it is that a debit balance is an under provision and a credit balance is an over provision. This is covered in the class notes.

Thanks

[P2-D2]

Hi,

I’d ignore what AI says as it clearly doesn’t know that the tax payable balance shown in current liabilities is the year-end estimate of what we expect to pay. The answer is therefore the $137,600. There isn’t any working required in this instance as we are given the figure in the question itself.

Thanks

[P2-D2]

Hi,

I think there were errors in the video, so please just refer to the class notes for the correct answer, sorry.

Thanks

[P2-D2]

Hi,

Sorry, we can only provide exam advice and cannot provide advice in relation to client services.

Thanks

[P2-D2]

Hi. The technical article is correct in the treatment of contingent consideration in that it is treated under IFRS 3 and measured at fair value. It is therefore included in the fair value of the considerationin the group accounts. Thanks

[P2-D2]

Hi. Payback isn’t relevant to the accounting for leases. It might be something to consider in Financial Management. Thanks

[P2-D2]

Yes, I need to update the recordings for IFRS18 but haven’t had time to do so. The changes are more a cosmetic/presentation aspect and you should still arrive at the same profit figure.

Thanks

[P2-D2]

Hi,

Fundamentally I’d look to use double entry debits and credits as this then allows you a more thorough understanding of how entries are accounted for. You can just learn by heart where things go but this an lead to mistakes if things change up slightly in a question.

What is it that you do not understand about T-accounts?

Thanks

[P2-D2]

It is a FV adjustment as it took place at the acquisition date. Thanks.

[P2-D2]

Agreed. The materials are correct.

[P2-D2]

Hi,

Before we do any intra group elimination we need to ensure the individual accounts are correct first. We therefore need to account for the interest in full first, thus deducting it from the subsidiary books first.

Thanks

[P2-D2]

You use the fair value increase and depreciate it over the remaining life of the PPE.

[P2-D2]

Yes.

[P2-D2]

Hi,

The key to exam success is to practise the exam standard questions under exam conditions. This means not using any notes, not looking at the answer for help, using the exam software to answer the questions and doing them to time. The more you do this the more your chances of passing increase.

Keep up the hard work.

Thanks

[P2-D2]

Hi,

It all looks right as it specifically says in the question where both depreciation and amortisation are charged. What is being done follows the instructions in the question.

Please let me know if this doesn’t answer the question.

Thanks

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