Forums › ACCA Forums › ACCA FR Financial Reporting Forums › *** F7 June 2016 Exam was.. Instant Poll and comments ***
- This topic has 456 replies, 63 voices, and was last updated 8 years ago by accastudent1986.
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- June 8, 2016 at 8:45 pm #321138
goodluck to you cocky cow. if u bet on this question you will just lose ur money.
June 8, 2016 at 8:46 pm #321141@accastudent1986 said:
Study text says that any decrease in deferred tax provision is presented in OCI and any increase reduces retained earningsI think you mean deferred tax attributable to revaluation, then yes, but they said in exam not to think about it. So, disregard
June 8, 2016 at 8:47 pm #321142It is the movement on deferred tax that will need to be accounted for:
Increase in deferred tax provision:
Dr Income tax expense/equity
X
Cr Deferred tax (SFP)
X
Reduction in deferred tax provision:
Dr Deferred tax (SFP)
X
Cr Income tax expense/OCI
X
June 8, 2016 at 8:48 pm #321143@faizsaid said:
goodluck to you cocky cow. if u bet on this question you will just lose ur money.Hahahaha so i proved u to be wrong. And be careful with your words. And dont close the case until u are sure about what u are writing
June 8, 2016 at 8:49 pm #321145@accastudent1986 said:
It is the movement on deferred tax that will need to be accounted for:Increase in deferred tax provision:
Dr Income tax expense/equity
X
Bro, i have just looked through ias 1 and the only deferred tax to be recognized in oci is the one related to revaluation surplus
Cr Deferred tax (SFP)
X
Reduction in deferred tax provision:
Dr Deferred tax (SFP)
X
Cr Income tax expense/OCI
X
June 8, 2016 at 8:50 pm #321148@accastudent1986 said:
It is the movement on deferred tax that will need to be accounted for:Increase in deferred tax provision:
Dr Income tax expense/equity
X
I havent seen this in ias 1. The only deferred tax in oci is the one related to revaluation surplus
Cr Deferred tax (SFP)
X
Reduction in deferred tax provision:
Dr Deferred tax (SFP)
X
Cr Income tax expense/OCI
X
June 8, 2016 at 8:51 pm #321150I disagree on that, i know that a revaluation gain creates a deferred tax asset which is also shown in OCI but so does an ordinary reduction in deferred tax provision.
June 8, 2016 at 8:52 pm #321151TBH i know i’ve cocked up bits and pieces but i’m hoping i’ve shown enough understanding of the method and given clear workings that i’ll tot up enough points to achieve a pass as i seriously do not want to sit this exam for a 3rd time!
June 8, 2016 at 8:54 pm #321154@accastudent1986 said:
I disagree on that, i know that a revaluation gain creates a deferred tax asset which is also shown in OCI but so does an ordinary reduction in deferred tax provision.Could you find me this in ias 1, please?
June 8, 2016 at 8:55 pm #321155@accastudent1986 said:
I disagree on that, i know that a revaluation gain creates a deferred tax asset which is also shown in OCI but so does an ordinary reduction in deferred tax provision.Reduction in deferred provision just reduces your tax expdnse for the year, thats it
June 8, 2016 at 8:56 pm #321156My quote above was from the Kaplan F7 text book
June 8, 2016 at 9:00 pm #321159@accastudent1986 said:
My quote above was from the Kaplan F7 text bookBut if you look through IAS1 presentation of financial statements, you will not be able to see deferred tax in oci,,only the one related to revaluation
June 8, 2016 at 9:01 pm #321160I’m looking through the taxation chapter and it does go on to agree with your point, although my quote above does contradict that :-S
June 8, 2016 at 9:02 pm #321162@accastudent1986 said:
I’m looking through the taxation chapter and it does go on to agree with your point, although my quote above does contradict that :-SI practiced many questions on ias 1 and the only time i saw deferred tax in oci was coming from revaluation
June 8, 2016 at 9:05 pm #321163Even in the exam question itself they wrote: Any deferred tax movement should be reported in profit or loss.
June 8, 2016 at 9:05 pm #321164You agree that my quote above flies in the face of that though right?
Also just to clarify and help me understand where i went wrong with this contract asset do you believe that i should have added $15m to COS and increased revenue by $18.75m and statement the asset as $8.75m ($18.75m – $10m)?
June 8, 2016 at 9:12 pm #321166@accastudent1986 said:
You agree that my quote above flies in the face of that though right?Also just to clarify and help me understand where i went wrong with this contract asset do you believe that i should have added $15m to COS and increased revenue by $18.75m and statement the asset as $8.75m ($18.75m – $10m)?
Regarding defered tax, im looking through past papers, no any case sith deferred in oci
Regarding asset, yes, you should have done it
June 8, 2016 at 9:16 pm #321167ok i’ve corrected those elements on the SOFP but still have a variance any ideas?;
Statement of Financial Position:
Non-current assets:
Property, Plant & Equipment 104,400
Patent 3,400
107,800
Current assets:
Inventory 32,100
Trade receivables 38,500
Contract asset 8,750
79,350
Total Assets: 187,150Equity:
Share capital 25,000
Retained earnings 51,444
Other equity 11,800
Equity option 2,430
Revaluation reserve 9,600
100,274
Non-current liabilities:
Loan note 28,276Current liabilities:
Trade payables 46,400
Income tax 11,400
Deferred tax 3,700
Bank Overdraft 2,700
64,200
Total equity & liabilities 192,750Reconciling difference 5,600
June 8, 2016 at 9:19 pm #321168@accastudent1986 said:
ok i’ve corrected those elements on the SOFP but still have a variance any ideas?;Statement of Financial Position:
Non-current assets:
Property, Plant & Equipment 104,400
Patent 3,400
107,800
Current assets:
Inventory 32,100
Trade receivables 38,500
Contract asset 8,750
79,350
Total Assets: 187,150Equity:
Share capital 25,000
Retained earnings 51,444
Other equity 11,800
Equity option 2,430
Revaluation reserve 9,600
100,274
Non-current liabilities:
Loan note 28,276Current liabilities:
Trade payables 46,400
Income tax 11,400
Deferred tax 3,700
Bank Overdraft 2,700
64,200
Total equity & liabilities 192,750Reconciling difference 5,600
1) revaluation reserve is 9200
2) transfer from rev durp to ret ear. is 400
3) in income statement, you should have writedown expense on patent equal to 3750-3400=350June 8, 2016 at 9:20 pm #321169U also missed current and non current deferred income
June 8, 2016 at 9:21 pm #321170Deferred tax is non current
June 8, 2016 at 9:23 pm #321171I added the 350 impairment expense to P&L and came up with profit for year of 43,844 amended reserve & ret earnings as i’d marked transfer the wrong way round so revaluation reserve should be 8,800 and earnings of 52,244 but still have 5,600 variance
June 8, 2016 at 9:24 pm #321172plus if i add the deferred income the gap will increase further
June 8, 2016 at 9:27 pm #321173@accastudent1986 said:
I added the 350 impairment expense to P&L and came up with profit for year of 43,844 amended reserve & ret earnings as i’d marked transfer the wrong way round so revaluation reserve should be 8,800 and earnings of 52,244 but still have 5,600 varianceBut u should recognized deferred income.
8800 will be recorded in sfp, but in pl it will be recorded as 9200
June 8, 2016 at 9:30 pm #321175I have 9,200 in P&L under OCI but 8,800 in SOFP.
Why would a deferred income liability be recognised? if i’m showing the difference between revenue ($18.75m) and payments received ($10m) as an asset already at a value of $8.75m?
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