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Dear sir
When one company will treated as significant of the group ? What is the required materiality level ?
ThanksNo definition is available – materiality is in the eye of the beholder. Where one firm of auditors may consider a subsidiary as material, it’s possible that a different firm of auditors would consider that same subsidiary to be immaterial
In the exam the examiner will make it unambiguously apparent that the subsidiary is (or, equally, is not) material by giving values for revenue, profits, assets that are then to be considered by you in a brief discussion about materiality
Does that help?
Sir
Still I am not clear . For exam Q in Dec 13 named Stow how do I know zennor is the significance of the group?$22.5m projected profit for Zennor compared with group projected profit (inclusive of 11/12s of this $22.5m) of $200m
That’s greater than 10% (actually it’s 10.3125% of this year’s group profit)
$200m worth of assets at the year end compared with $2,500m total group assets including Zennor’s $200m ….. that’s 8% of group assets
How many more indicators do you need before you determine that Zennor is material to the group?
It even has its own internal audit team suggesting that it’s a sizable operation!
That means any materiality figure exceeds the 10% or 8 % I assume the companies are material for the group.
In exam standard Question how many points do I need to make for 13 marks like question retriever (6/13)?
ThanksIt depends what you are aiming for! If you want to barely scrape through the exam, you need to score 50% or more of the available marks (6.5 / 7 marks)
You suggest 6 out of 13. That’s 46% and a clear FAIL
If you want to pass with comfort, you should be looking to score maybe 65% – 75% of the available marks (8/10 marks)
But if you want to be properly on top of the subject, you could be looking to score 90%+ of those marks (12/13 marks)
Basically you need to work on the principle of one mark for each separate, valid, relevant, markable point
Check out the course notes for guidance on 3 measures of materiality – it’s all in there
Dear sir
Do I need to make subheading for every valid & relevant point either can I make just one valid point for 1 mark?
For example acquisition of subsidiary–
1. Good calculation
2.Goodwill impairment
3. IFRS 3 business combination disclosure
4.intra company transactions
5.Related party transaction if have.
If I just make separate paragraph for above point without headings is it ok for exam for 1 mark for every point.
In June exam I made subheadings for paragraph in question number one but I feel difficult to make subheadings for every paragraph.
If I write down three separate , valid & relevant point under one subheadings how many mark will I get?
Thanks“Do I need to make subheading for every valid & relevant point ” – NO
“can I make just one valid point for 1 mark?” – YES
“If I just make separate paragraph for above point without headings is it ok for exam for 1 mark for every point.” – YES so long as you write in proper sentences
What’s the point of a heading when there’s only one point within that heading?
“If I write down three separate , valid & relevant point under one subheadings how many mark will I get?” – THREE
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