• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

June 2025 ACCA Exams

How was your exam? Comments & Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Bravado 2009 June P2 Exam Question

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Bravado 2009 June P2 Exam Question

  • This topic has 3 replies, 4 voices, and was last updated 2 years ago by Stephen Widberg.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • February 24, 2018 at 2:48 pm #438718
    Kyaw
    Member
    • Topics: 31
    • Replies: 37
    • ☆☆

    Dear Sir, I am not a native English speaker. I have difficult in this question. The question gives $ to dinar Exchanged rate. I think 1$ is equal to 4.5 dinars at 1 June 2007. but in acca answer they are calculated as 1 dinar is equal to $4.5. How can I understand that?

    On 1 June 2007, Bravado purchased an equity instrument of 11 million dinars which was its fair value. The
    instrument was classified as available-for-sale. The relevant exchange rates and fair values were as follows:
    $ to dinars …………………………. Fair value of instrument –
    ……………………………………………………………………….dinars
    1 June 2007 …………..4·5 ……………………………………………..11
    31 May 2008 …………..5·1……………………………………………. 10
    31 May 2009 ………….4·8 ……………………………………………..7
    Bravado has not recorded any change in the value of the instrument since 31 May 2008. The reduction in fair
    value as at 31 May 2009 is deemed to be as a result of impairment.

    Working 4
    Available for sale instrument
    Date……………………….. Exchange rate …………………….Value ………….Change in fair value
    ……………………………………………………….Dinars m ………$m……………….. $m
    1 June 2007 ……………….4·5…………………. 11 …………….49·5
    31 May 2008……………… 5·1 ………………….10 …………….51 …………………1·5
    31 May 2009 ……………….4·8………………….. 7 ……………33·6 ……………(17·4)
    The asset’s fair value in the overseas currency has declined for successive periods. However, no impairment loss is recognised
    in the year ended 31 May 2008 as there is no loss in the reporting currency ($). The gain of $1·5 million would be recorded
    in equity. However, in the year to 31 May 2009 an impairment loss of $17·4 million will be recorded as follows:
    $m
    DR Other components of equity 1·5
    DR Profit or loss 15·9
    CR AFS investments 17·4

    March 4, 2018 at 7:20 pm #440176
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    It specifically states $ to dinars in the question so the figure given is the $ figure, so $4.5 to the dinar.

    As for what you are then struggling with then I’m sorry but I don’t know what it is as it seems as if you’ve just copied out the answer. If you let me know what it is you are struggling with then I’ll happily help.

    Thanks

    February 1, 2023 at 10:40 pm #677870
    Nazi
    Participant
    • Topics: 0
    • Replies: 3
    • ☆

    Within part (e) of the question it specifically states “Bravado has not recorded any change in value of the instrument since 31 May 20X8” so the gain of $1.5 million will already have been recorded and will be in the financial statements already.

    The mistake in your solution is that you are taking the $1.5 million gain, which is causing an excess and eventually producing an incorrect answer.

    The solution will be as follows:
    Fv @ 1st.June.07 = 11mDinars x $4.5 = 49.5
    Fv @ 1st.June.08 = 10mDinars x $5.1 = 51
    51-49.5 = 1.5, this gain is already recorded in the financial statements, so you don’t have to do anything about it.
    Fv @ 1st.June.08 = 7mDinars x $4.8 = 33.6
    Now as you can see the fair value has declined from 51 to 33.6, a difference of 17.4m. This loss will be taken to OCE, with the following double entry.
    Debit OCE 17.4
    Credit Investment 17.4
    The debit OCE will reduce the group OCE. and the Credit Invesment of 17.4 will reduce the financial asset in non-current assets.

    February 2, 2023 at 1:38 pm #678022
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3408
    • ☆☆☆☆☆

    🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Bravado 2009 June P2 Exam Question’ is closed to new replies.

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • poojam on Objective of financial reporting – ACCA Financial Reporting (FR)
  • mm3677 on IAS 16 Accounting for a revaluation – CIMA F1 Financial Reporting
  • Anastesia123 on MA Chapter 1 Questions Accounting for Management
  • John Moffat on MA Chapter 26 Questions Variance Analysis
  • acowtant on Changes in group structure – examples – ACCA SBR lectures

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in