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Dear Mike,
Could you please advice this note from past paper question?
Revenue includes a $3 million sale made on 1 January 2015 of maturing goods which are not biological assets.
The carrying amount of these goods at the date of sale was $2 million. Moston is still in possession of the goods(but they have not been included in the inventory count) and has an unexercised option to repurchase them atany time in the next three years. In three years’ time the goods are expected to be worth $5 million. The repurchase price will be the original selling price plus interest at 10% per annum from the date of sale to the date of repurchase.Why should we deduct ot from revenue?
Also one more question from June 2014 Past Paper fromm the question Penketh.
Non-controlling interest in total comprehensive income:
Non-controlling interest in statement of profit or loss (above)
Other comprehensive income ((3,000 – 2,000) x 40%)Could you please advise why he deducted from other comprehesive income 2000. It was above and I have added it
“Why should we deduct ot from revenue?”
Because it’s not a sale! It’s a loan with the maturing goods given as security
“Non-controlling interest in statement of profit or loss (above)
Other comprehensive income ((3,000 – 2,000) x 40%)Could you please advise why he deducted from other comprehesive income 2000. It was above and I have added it”
The land was revalued at date of acquisition by $2,000
Then it gained a further $1,000 since acquisition
In Total the land has increased in fair value by $3,000
But $2,000 of that was as at date of acquisition
So only ($3,000 – $2,000) is in the post acquisition period
Does that explain it for you?
Thanks mike however, can you please elaborate why 2m was deducted from COS? Thanks
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