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hello sir,
i have 2 questions in my mind;
1.when calculating materiality, is it sufficient to calculate materiality through one method like 0.5% of revenue only and not others like assets and profit
2.i usually write the plan on question booklet and then sometimes cancel it out, would it be better to write on answer booklet the plan, maybe we could get extra marks 🙂
1. No, it is NOT sufficient. What if the matter has nothing to do with expenses / revenues and thus is irrelevant for comparing with the profit figure
Look at some of the answers from the examiner where it would not be unusual to read something like “Whereas the amount is clearly immaterial to the results for the year – less that .02% of reported profits – it represents an amount of 12% of net assets and is therefore material”
2. It most certainly is a WONDERFUL idea to write your plan in the answer book and NOT in the question paper.
And DO NOT cross it out as you work through the plan with your answer
Head it “Plan” and tick off the points as you fill them out into sentence format within your answer. Rule it off when you are ready to start your proper answer but don’t cross out your plan
Hi Sir
please tell what is materiality level for profit, Assets and Revenue?
Is that correct, if we use the same materiality level for all Q?Sir can you confirm me which standard was to be used in Dec 16 exam related to the acquisition of aircraft by taking a loan, as I am confused was it ifrs9 or borrowing cost if any of the students has discussed with you the question.
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