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Good day sir,
just these quick ones on Dec 2014 question.
Question 18
1) the determination of the sales proceeds of an item of plant sold before the year end
2) A change in tax rate announced after the reporting date, but affecting the current tax liability,
Q. Which of the two is an adjusting event.?
Q20. Isaac is a company which buys agricultural products from wholesale suppliers to the general public.It is preparing its financial statements for the year ending 30 september 2014 and is considering its closing inventory.
Q. In addition to IAS 2-Inventories, which of the following IFRS may be relevant to determining the figure to be included in its financial statements for closing inventories.
A. IAS 10 Events after the reporting period
B. IAS11. Construction contracts
C. IAS16. Property plant and equipments
D. IAS 41. agriculture.
In my answer I selected D but the answer given by the examine is A.sir can you explain to me the choice of A.Thank you for always being there for us
Q 18 – answer is 1). It fixes with greater certainty an amount or estimate that DID exist at theaccounting date whereas the tax rate changed only AFTER the year end date
Q 20 – you’ve allowed yourself to be led astray by the word “agriculture” in the expression “agricultural machinery”!
Drop the word “agricultural” from the question and now reconsider your answer. Option A allows closing inventory to be more reasonably assessed for “net realisable value” and that surely must be the correct answer!
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