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Q1 was very cheap just two adjustment on Revenue recognition of a joint venture (If you read SA on revenue this is a bonus) and IFRS 5 very simple as well. The question states that the asset met the recognition criteria and to crown it all, it was within the twelve months limit. Measurements lower of CV and RA while RA is higher of Fv less cost to sell and value in use. I think RA was higher. And CV was lower. Just compare the difference between CV and the selling price. Again, the asset was said to be depreciated by $300k pa. Just porate I think the asset was sold 4months after meeting the held for sale recognition criteria. Adjustment (a) was on step acquisition from associate to control (gain on disposal was required), then goodwill. Adjustment to goodwill can only take place within the 12months limit and the contingent liability adjustment and Fair value of asset was within this limit so goodwill should be adjusted (again SA is sufficient on this). Hugh (subsidiary II) was very simple basic consolidation (F7). 1b. Share based payment (share appreciation) is vested immediately and should recognised and provided for. 1c. Ethics the entity needed finance and was considering doctoring it financial statements plus the new Financial Controller was eager to do that because he doesn’t want to lose his job (F8) Knowledge was applied here. Part B was quite simple but I concentrated more on 1 for my preparation. Q4 relates to a question on my revision kit KEY. Q1 relates to GRANGE. Q3 IFRS 3, IAS 36 (economic life(30) or the life of the asset when it is due for disposal (10years)) ten was chosen by the entity INSTEAD of 30years. Then the asset has different components with different useful life which are 7, 10, and 30 I think. But the entity chose 30 for all. Which not in correct according to IAS 36. All in all, the exam was ok at least, for those who were ready. I wasn’t well prepared but I won’t lie. It was easy.
Can free cash flow to equity be calculated without considering loan repayment and increase/decrease in working capital (short term loan to be specific)?
What was done was:
Net operating activities 210
Interest paid. (4)
Interest received. 12
Interest paid on lease. (6.5)
Taxation. (4.1)
Capital expenditure. (120.2)But loan repayment and decrease in short term were not considered. I believed loan repayments should be deducted while decrease in short term investment be added to get FCFE.
P4. I thought we are to deduct repayment of loan (financing activities) and add decrease in short term loan (it falls under working capital) but these were not considered. Maybe I ought to say formula.
<cite> @donizback said:</cite>
for me WACC was 12.2% looks a decent figure to me,
Q1 i think u r wrong the project was with positive NPV<cite> @greggie said:</cite>
I got an insane npv for q1. 4.9m on a 5.5m investment or something like that. Couldnt see where i went wrong though.The mm hedge I made at around 1900 better. Again, not sure on this.
On wacc I got another ridiculous figure of 8% but I think I messed up bank debt.
I got 4.9m as well bro