June 2015 exam

"((11,800 – 5,800)/(29,200 – 7,200 – 7,000 see below) x 100)" By deducting 7,000 that has excluded the 1,000 profit. The sale was for 8,000 and 1,000 profit achieved so capital employed before the sale was only 7,000 OK?

For mcq qn 7) can you check if i'm evaluating the options correctly. A: revaluation uowards therefore equity will increase , therefore gearing will reduce B: bonus issue therefore no effect on gearing C: debt reduce therefore gearing reduce. D: Increase in debt only, therefore increase in gearing.

Yes, when you're looking at a calculation of debt / (debt + equity) all you're really looking for is the situation where debt increases and, in this question, the only option where debt increases is option D OK?

Okay. As for qn 8) mcq i: germane is not a parent co because it only owns less than 40% of the voting shares and it doesnt satisfy the 3 conditions to have control over the co right ? ii: for this option i dont know why its the parent. Im not sure on how to analyze this qn. iii: germane is a parent because it has the ability to affect the returns through its power over prolly right ?

(i) 40% only of the voting shares. The other 60% may be held in the ownership of just one person / one company so clearly they would be the parent. But even without that Germane is not on control Interesting to note that, under IFRS 10, Germane MAY be in effective control dependent upon the disposition of the remaining 60%. But the questions asks "Germane necessarily the parent company" (ii) Germane holds financial instruments that, if / when converted, will give Germane control. Potentially, if all loan note holders convert that would involve the issue of 400,000 new equity shares and Germane would get 320,000 of those new shares So now there are 1,400,000 shares in issue and Germane has 400,000 + 320,000 = 720,000 share and that represents greater than 50% of the 1,400,000 shares in issue (iii) "and has the ability to affect these returns through its power over Polly" - the key word in consolidations is "control" and in this situation Germane has the ability "to affect these returns through its power" So Germane is in control and is therefore the parent OK?

Okay. For qn 10) (i) ias 41 apply because its relating to living animals (ii) ias 41 does not apply because the logs are no longer a living plant (iii) agricultural land accounted for under IAS 16 (iv) why does IAS 41 not apply to this option ?

Anuja, are you going to ask me (effectively) all the questions? I'm asking because I too have a life! Here's a hint for you when facing a question like this! Identify the key option. In this case, it's option (ii) Now, I know that IAS 41 does not apply to harvested produce. Once the tree has been cut down, it's no longer a living plant of animal so IAS 41 does not apply Now, consider the 4 optional answers from which you have to select the correct one You know that IAS 41 does not apply to option (ii) So where does that leave you? If IAS 41 DID apply to option (iv), which of the four possible answers would you select?