My pass or fail depends on MCQs so really want to know the answers to these. Anyone interested in discussing the MCQS just join in.
1 Which of the following is a change of accounting policy under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors?
A Classifying commission earned as revenue in the statement of profit or loss, having previously classified it as other operating income
B Switching to purchasing plant using finance leases from a previous policy of purchasing plant for cash
C Changing the value of a subsidiary’s inventory in line with the group policy for inventory valuation when preparing the consolidated financial statements
D Revising the remaining useful life of a depreciable asset
I chose C, only because I remember reading something relating to inventory in the change of policy section in the BPP book :)
Anyway, which option did you guys choose and why
ACCA Forums
FRF7 exam (DEC 14) MCQ discussion
@riskyguy said: Share your vision with me :) What do you think. B or CI still think we are right lol.
@xlnc123 said: I still think we are right lol.Ameen
@riskyguy said: AmeenIA we are right Any other answers that you didn't agree with
@xlnc123 said: IA we are right Any other answers that you didn't agree withYes, I don't really remember my option for MCQ 3, chose A or B maybe. But I think B is the right option. Accumulated depriciaton would have to be deducted from the plant. A new plant and a two year old plant both cannot cost 600,000
Q7 is D as the finance company has full recourse this receivable should not be written off and must be shown as an Asset in B/S, and the sale proceed as deferred income. I chose B or C though :(
It's definitely a. On the balance sheet date, it was revalued hence no depreciation would be charged.
@xlnc123 said: It's definitely a. On the balance sheet date, it was revalued hence no depreciation would be charged.It's not about revaluation. That's the current price of the NEW plant that we have with us. A new and a 2 yr old plant cannot be of same value.
@riskyguy said: Q7 is D as the finance company has full recourse this receivable should not be written off and must be shown as an Asset in B/S, and the sale proceed as deferred income. I chose B or C though :(I didn't choose D as receivables are already an asset. A is def wrong. So my process of elimination was B or C c could be wrong because it's deferred liability. (Never understood why) but it offsets expenses
@riskyguy said: It's not about revaluation. That's the current price of the NEW plant that we have with us. A new and a 2 yr old plant cannot be of same value.Fair point. I read current price as fair value. Current price would dictate replacement cost.
@xlnc123 said: Fair point. I read current price as fair value. Current price would dictate replacement cost.Exactly, I don't remember my answer though, so not counting marks from this mcq, prudence concept :). But I hope i got it right, I thought abt it a lot in the exam :)
@riskyguy said: Exactly, I don't remember my answer though, so not counting marks from this mcq, prudence concept :). But I hope i got it right, I thought abt it a lot in the exam :)So HCA is agreed but how do you get the other number? 384?
@xlnc123 said: I didn't choose D as receivables are already an asset. A is def wrong. So my process of elimination was B or C c could be wrong because it's deferred liability. (Never understood why) but it offsets expensesOption D, how I understand it now is, the examiner is asking us, the receivables were sold to a finance company, but the finance company has full recourse, so should they be (still) recognized as an Asset. Yes, as the finance company has full recourse they should still be recognized as an Asset, common adjustment in Final accounts question. But well I maybe wrong on this one. I remember choosing one from B or C. A was definitely wrong.
@xlnc123 said: So HCA is agreed but how do you get the other number? 384?SP 600000 RV 60000 = (600000x0.10) Dep. 600000-60000/5 = 108000 x 2 = 216000 600000 - 216000 = 384000
@riskyguy said: Option D, how I understand it now is, the examiner is asking us, the receivables were sold to a finance company, but the finance company has full recourse, so should they be (still) recognized as an Asset. Yes, as the finance company has full recourse they should still be recognized as an Asset, common adjustment in Final accounts question. But well I maybe wrong on this one. I remember choosing one from B or C. A was definitely wrong.Hopefully we get more than 50% but question 1 killed me. Doesn't make sense even after the exam lol
@xlnc123 said: Hopefully we get more than 50% but question 1 killed me. Doesn't make sense even after the exam lolIA, oh yes, Q1 also had me in trouble. I wish the question was just to calculate the same ratios for another company, it would have been great :) But I think we will still get marks for valid points made in discussion even if our ratios were calculated wrong. I think I should have redrafted the P/L, it would have become easier then. But I tweaked only those things that had to be used in the ratios, which resulted in many mistakes.
@riskyguy said: @Xlnc Great job! Anyway, below is the solution someone provided in another thread for MCQ 17. What do you think about it. Just like you I got the C option though. seabed restoration: 250X10000 dismantling: 30000000X0.68X1.08 (8% is the increase of the provision for the year) the two of them together is answer B Another solution for option B so we have the restorative cost of $2,500,000 then we need to add the dismantling provision value at 30 Sept 2013 – 0.68*30 mln=20,400,000 however, since we’re interested at the provision amount one year later – ie Sept 30 2014, we need to unwind the discount for 1 year -> 0.08*20,400,000=1,632,000. when we add these three together -> we get answer BDont you think that unwinding of discount increases a finance cost (PL) and have not be capitalised? I read it in chapter 2.(Tangible non current assets). different opinions, please share :)
@tatiaaaaaaa said: Dont you think that unwinding of discount increases a finance cost (PL) and have not be capitalised? I read it in chapter 2.(Tangible non current assets). different opinions, please share :)Searched a bit, B is the correct option for Q17 :( (Post # 5) https://opentuition.com/topic/unwinding-of-discount/
Also, Can you share your results about consolidation statements?
MCQ-s and Q3 are my hopes for reaching 50 points. But I am not sure. Anyway, today I have started reading theory book of F7. For June exams :D
In addition, this was my first ACCA exam and I like the way you are sharing your experience and results. It is very useful :)
Thanks all :) :)
@piggy93 said: Yes.. But the question ask for provision. I think his answer is right.....?Mdaa.. :) I am not sure but in respects of oil operations I guess it muyst be without interest rate. Very interesting :))))
@tatiaaaaaaa said: Also, Can you share your results about consolidation statements? MCQ-s and Q3 are my hopes for reaching 50 points. But I am not sure. Anyway, today I have started reading theory book of F7. For June exams :D In addition, this was my first ACCA exam and I like the way you are sharing your experience and results. It is very useful :) Thanks all :) :)You know what, maybe I'll do question 2/3 and share them here. Don't even want to see Q1 again.
I read the question 17 again and again and it says provision in its SOFP.
If we consider that finance costs appears in PL, we had to calculate only capitalized cost..
...?
@riskyguy said: You know what, maybe I'll do question 2/3 and share them here. Don't even want to see Q1 again.Unfortunately, I have not even touchd to Q1 :D Also time was out.
@piggy93 said: Your concept is correct! When we purchase an asset and some environment cost will be incurred we will capitalise the environment cost Example: Year 0, Asset 500 Environment cost 100 incur in Year 2. Cost of capital 10%. Dr Asset (500+100/1.1^2) 583 Cr Bank 500 Cr Provision 83 End of year 0, Dr Finance cost (83*0.1) 8 Cr Provision 8Sooo..? What do you think, B or C?
@tatiaaaaaaa said: Unfortunately, I have not even touchd to Q1 :D Also time was out.I left it for the end. But I did attempt it though because there are easy marks in every question, so no question should be left unattempted. Would be happy with 5-6 marks from Q1. :)
@piggy93 said: I think you misunderstand the about provision? It is liability, not asset...and, the TOTAL PROVISION will be Sum of them... Correct yeah I understand. :(
@riskyguy said: 18 Which of the following is NOT an indicator of impairment under IAS 36 Impairment of Assets? A Advances in the technological environment in which an asset is employed have an adverse impact on its future use B An increase in interest rates which increases the discount rate an entity uses C The carrying amount of an entity’s net assets is lower than the entity’s number of shares in issue multiplied by its share price D The estimated net realisable value of inventory has been reduced due to fire damage although this value is greater than its carrying amountThose who were saying that the answer for Q18 is D, were right n were wrong as well. Their reasoning was that NRV is greater than CV so its not impaired. Their reasoning is wrong but their answer correct. IAS 36 does not deal with inventory, IAS 2 does. That is why option D is correct.
11y ago#57The answer to Q18 is C.
The key is that the carrying amount of a CGU's net assets is lower than its market capitalisation means that it is not an indication of impairment.
Damage caused by fire is an indication of impairment as the NRV may be reduced lower than its carrying amount.
We are talking about indication of impairment, i.e. an event that triggers an impairment review, rather than an impairment loss occurring.
Therefore, D is still an indication of impairment, but upon testing, there is no impairment loss.
I hope both of you're right. In the exam I also chose C, so I hope this turns out to be correct. My friends were whining about how tricky the MCQS were and I didn't agree, now I realize how wrong I was.
@piggy93 said: When r u going to do Q2&3?? :DQuestion 2 https://opentuition.com/topic/question-2-f7-exam-solution-attempt/ Do share your views.
Q18 C is about goodwill not impairment. So I think it's D.
Sign into reply to this topic.