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What do you mean by “minimum netting off”? Could you please further explain it with examples some more?
Actually I have read the both questions and answers and that’s why I don’t understand the why the answer of PYQ 12/08 is in this way .
In fact the contingent asset should be treated as separate event and asset should be recognised if it is virtually certain that the reimbursement will be received and cannot offset against provision right?This is because if the revenue is recognised at point of time, control need to be passed include the transfer of risk and rewards of ownership. So, I wanna know whether revenue recognition in design stage could constitute transfer of rewards and risks of ownership?
If for example the financial year is 1.1.2007 to 31.12.2007, the contract is entered on Sep 2007 , as it will takes 6 months to complete so will it be expected to be completed by Feb 2008. In this case, how to recognise the revenue ?
So there is no major changes being made from the previous ISA 720 to revised ISA 720 right?
May I know what r the major changes between the previous and revised ISA 720 ? Especially the auditor’s responsibility in relation to the ‘other information’ ?
Means that either ‘other Matter’ paragraph or ‘other information’ which is considered as a appropriate heading could be used in this case?
AND last question from me is whether the ‘other information’ paragraph includes reporting on integrated report ?So if there is inconsistency between chairman report and financial statements and revision needed to be made to the chairman report , previously would be dealt in ‘ Other Matter’ paragraph but now would be stated in ‘other info’ paragraph right?
Could I interpret in this way?So what would be highlighted in the ‘other information’ paragraph in the Auditor’s report?
What if there is “Emphasis of matter” paragraph? What I have read from ISA 706 is the EOM paragraph would be placed after the KAM but before ‘going concern’ paragraph, contradict to what contained in ISA 570. So could I come to my own interpretation that the sequence doesn’t matter?
If not mistaken the ISA 720 had been eliminated from the list of ISAs containing requirements for other matter paragraphs right?
Means those matters would be either stated in ‘Emphasis of Matter’s paragraph or ‘Key Audit Matter’ paragraph depends on the significant of matters? Correct?
Alright. Again the course note page 57 “Where the financial statements are prepared on a break-up basis, and the auditors agree with this basis, the audit report should be modified with an “emphasis of matter” paragraph.”
So in this paragraph, the EOM paragraph should be corrected to key audit matters paragraph right?
Means that if “EOM paragraph” or “other matter paragraph” and KAM paragraph is mutually exclusive? if KAM does appears in the auditor’s report then the “EOM” or “other matter paragraph” would not be possible to be included in the auditor’s report?
How about if the financial statements is prepared on break up basis? The Auditor’s report should be modified with unmodified opinion with “Other Matter” paragraph right?
The course note page 57 “Where the auditors consider that there are doubts over whether the entity is a going concern, they would wish to see additional disclosures in the financial statements. If appropriate disclosure is given and the auditors do not disagree with the use of the going concern basis, then the audit report will be unqualified with an additional
“emphasis of matter” paragraph.”So the “emphasis of matter” paragraph should be corrected to Material Uncertainty Related to Going Concern paragraph right?