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1. For September 2018, question 1 analytical procedure, in the greating ratio, should’t it be total liability over total equity ? equity is the total amount but for liability why did they only use non current liability ? shouldn’t we suppose to use the total liability which includes non current and current liability ?
In addition, for the non current liability, may did we exclude provision amount ? for gearing we only include debt amount ? because deferred tax was also excluded in the calculation of March/June 2017 question
2. for analytical procedures, i can calculate any ratios with the provided information in th question (Assuming i provide with comparatives ) ?
3 For IAs 20 government grant accounting standard, if satisfy government condition and we have recognized the grant in P/L account to match against the expenditure to satisfy that condition, but the reminaing those not satisfied, is in deferred income will be recognized in balance sheet liability portion ?
1 The normal calculation of gearing is either:
(Long term loans plus preference shares)/(Equity + reserves)
Or
(Long term loans plus preference shares)/(Equity + reserves + lomg term loans + preference shares)
2 You can calculate any you want to but they should be,relevant to the question. So there is no point in calculating ROCE if liquidity is being examined.
3 Yes.
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