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I cannot remember both clearly.
On building 2, I used original price of £120000 + index allowance as base cost as it was transferred on NLNG basis , hence transfer price between the groups are irrelevant, the original acquisition price is that base cost, and at time disposal, IA is given.
On building1, I cannot remember the figure, but involves work out rollover relief on the warehouse 1st , then building 1 acquisition price need to less then rollover relief to reduce the base cost. at last apply index allowance to get the final figure.
I am not sure if this was correct approach or not.
Hi all
Anyone wrote the answer in q3 a (1), conceptual framework affects valuation on inventory as re-introduce prudence concept? Not to overstate asset at the year end as value of inventory has a great deal of uncertainty about coal prices? Not sure if I can get any points for trying answer in this approach.
Also just done the ACCA student surveys with feedback as it is a very difficult paper, not within the scope of learning Criteria.
Q2
Gearing with 28m revaluation ( 8 millimeters is other equity component) is 49.7%, with arm length fair value 22m the OQE reduced by 6m, then gearing is 52%. The correct accounting treatment means loan repay in full immediately where md is try to avoid.
Deposit is not revenue, it is refundable if asset is not complete constructed, so it shall be liability.
Revenue cannot recognize in stage as the performance obligations in contract is on completion of building asset.
MD is try to boost the revenue to obtain profit to ease the worries from investors and bank.
Accountant ethical as usual staffs.
Hi all
I have been shocked by so many questions and with the limitations on the time, I try as much as I can. In the last 30 minutes some of answer was back to my mind but I don’t gave time to get it onto paper in the best way. A few answers i did as:
1, (i) cash flow PAT with adjustments to non cash item, remove associate profit, working capital both in number and narratives.
(ii)For the impact on acquiring Davenport I wrote no impact on consideration as it is deferred and interim dividend received shall be included in cash generated from investments activity (IA)Disposal of baham proceeds is part of IA.
(iii) Disposal of Bahamian is not discontinued operations, don’t know why, just guessed as similar subsidiaries are existing in the same geographical area.
Reduce share in Davenport to 35% is not ncahfs, simply profit loss on disposal and derecognising subidiray nci goodwill, investment in association recognized.
(iv ) I didn’t write anything and moved to q2.