Forum Replies Created
- Posts
I take your point. :).
The learning point is that the PPE is not derecognised. But I need to change the wording in the question slightly. I’ll do it when the lecture is next re-recorded.
Thank you for feeding this back.
Unrealsed profits are more likely to be tested in FR, but only for a mark or so. It’s not a major SBR issue.
I recommend you watch the FR lectures on groups again.
Golden rule = adjust in books of ‘seller’.
Strictly speaking, there will be a FX reserve, which would be used.
On the next update, I think I will change the requirement from ‘retained earnings’ to ‘reserves’
Thanks for pointing this out.
🙂
Your argument is very well put – you almost convinced me about the asset!
But, as you say, in reality, the money is given to a financial institution (e.g. Aviva) – it is an additional expense of employing the staff.
Interestingly, even DB plans were not on the balance sheet 30 years ago.
🙂
(Don’t forget that, in the exam, explanations are more important than numbers).
How to approach:
1. Cash settled element – Dr P&L Cr Liability
– normal calculation, based on FV of instrument at SFP date.2. Equity settled element – Dr P&L Cr Equity
– based on formula – A minus B
– A = Number of instruments if equity settled x FV of SHARE BASED ROUTE at grant date
– B = Number of instruments if cash settled x FV of instrrument at grant dateIf you are interested, detail in Chapter 8 of:
https://assets.kpmg.com/content/dam/kpmgsites/xx/pdf/ifrg/2024/isg-handbook-share-based-payments.pdf
No. Imagine that I make sausages.
My salary cost should reflect cost of making sausages not cost of buying other companies.
(Answer given for exam purposes only).
I think, as you say:
Dr Liability
Cr Salary expense(All answers given for exam purposes only 🙂 )
If the company sells 100 goods and (based on estimates) there’s a 30% chance of returns:
Dr Cash 100
Cr Revenue 70
Cr Contract liability 30The goods likely to be returned remain in inventory
1. Assuming they can take some revenue (as they have) in x8, and that’s only appropriate if there’s been a transfer of control. 🙂
2. Then, the change in contractual terms is a non-adjusting event. (I agree with that).
3. So the extra revenue will be takem in the x9 year, not the x8.
Hope trhis helps
🙂
Consideration type = cash
Variable = no
Record = on despatch (less expected returns)
Mismatch = don’t understand your questionNo revenue at all can be recognised unless there is a change in control (or some other criterial in IFRS 15 are satisfied).
What justification do they give for recognising any revenue? Let me know.
ACCA website = examinable documents
iasplus website has very useful summary of each standard
🙂
Equity based:
– reward usually share options
– calc uses FV of instrument at grant date
– Cr EquityCash based:
– reward is cash
– calc uses FV of instrument at SFP date
– Cr LiabilityAssume it’s PPE.
Dr PPE Cr Revenue
Don’t forget – ONLY USE JOURNALS IN THE ANSWER WHEN ASKED – JOURNALS ARE NOT EXPLANATIONS
🙂 🙂
If your double entry is OK, sprend some time on FR.
If your double entry is not OK – briefly review FA, then work on FR.
The key aspect of FR is the accounting standards – re-learning the rules.
🙂
Fair point. You would need the historic rate if you had to prove exchange differences in OCI.
However (trust me!) I would probably show the translation at both rates. 🙂
Please refer to Kim’s answer in AAA forum, and please don’t post in 2 forums. 🙂
I don’t have all the detail of these questions.
Best I can do is give you an example.
If inventory increases from 12 to 20, and the subsidiary acquired has inventory of 5, then the INCREASE IN INVENTORY will be 3 (and not 8).
If you agree with that, move on!! If not, come back to me.
🙂
Check the requirement:
– CALCULATE = calculate only
– EXPLAIN OR DISCUSS = write 3 sentences explaining what you have done – you don’t need to write as miuch as aboveIf you are asked to EXPLAIN / DISCUSS and all you do is calculate, you would not achieve a pass.
If it’s your weakest area, then appraching at the end of the exam may be sensible, BUT YOU MUST STICK TO YOUR TIME ALLOCATION..
Make sure you have worked through my examples:
https://opentuition.com/acca/sbr/
(Buckfastleigh, Staverton, Totnes)
It may help to revisit some of the basic adjustments i in our FR notes
