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Where was deferred tax?
ryanwilkes1985 wrote:1. Step acquisition, how to account for it in financial statements, the last part of 1 I was sure was a joint venture as it was organised through a business with a contractual agreement so needed to be accounted for using the equity method ???
ryanwilkes1985 wrote:Was through a company with a contractual agreement – joint venture to me
Oh…..I missed the word Company…..not goodd
Question 3 part 1
The guy owed a lot of tax I put about a provision, he needed to make an estimate, it wasn’t certain though so wasn’t sure if it was deferred tax or not ?
The interest question was easier same as IAS21 except no equity reserve and profits don’t get reclassified to profit from oci. Second part was saying how it could show pure trading with less variability if they have lots of foreign exchange. One exchange rate is advantageous as it could artificially boost assets and gains making the business look stronger and more profitable.
ryanwilkes1985 wrote:Was through a company with a contractual agreement – joint venture to me
How dumb I could be…..it was always a separate company ….. Time pressure is it.
Did you do the morning or afternoon uk paper.. I don’t remember seeing anything on interest unless I skipped it by error ?
Morning
I did the uk version so you may not see it as it was an frs102 question
did anyone get net identifiable assets AND liabilities, with retained earnings? What figure did people use for net assets for calculation of goodwill?
I did talk about the joint control but I forgot to mention more point where Malting is a separate entity so it gives the evidence that it appears to be a JV …. Wondering would it be zero marks instead? T.T
One because you couldn’t consume one without the other. The licence was dependent on the service contract. Over time and you needed to apportion a value to both parts of the contract.
The assets of the joint venture needed to be impaired. That’s why you needed to calculate goodwill
What about the question where you have to refer to the passage about there being sufficient disclosure on climate matters
ryanwilkes1985 wrote:Annoyed didn’t get reorganising provision but got decommissioning – can’t get them all
I think this was a joint venture between the three of them as a unianimous vote was required.
usmn567 wrote:So were two separate performance obligations or not
It was a single performance obligation cause the data would be useless to the customers without a license. Obligation is satisfied once the licenses are granted.
ryanwilkes1985 wrote:One because you couldn’t consume one without the other. The licence was dependent on the service contract. Over time and you needed to apportion a value to both parts of the contract.
As a single performance obligation, revenue should be recognised at a single point, once control passes on to the customer.
For the joint venture, there was no need to consolidate as it should be accounted for using equity accounting, so why would you be calculating goodwill at all?
The customer received the data over the time of the service contract with presentations and reports at specific times – it was one performance obligation but the control over the data was passed over time with the presentations
You seem to have missed that bit
The investment in joint venture can be impaired can it not – the question asked you to calculate goodwill ?
You still carry your share of net assets in the joint venture which can be impaired
Thinking back I don’t think it asked you to calculate goodwill – but the net assets of the joint venture were impaired the question gave you the amount needed for the impairment calulxation
ryanwilkes1985 wrote:The customer received the data over the time of the service contract with presentations and reports at specific times – it was one performance obligation but the control over the data was passed over time with the presentations
No, I did not miss it. That was deliberately added to the question for this reason lol. Revenue is recognised per performance obligation so the submission of data and reports does not amount to the performance of anything. How would you even quantify what portion of revenue to recognise for “time to time”?
Equity accounting is the same accounting method for Investments in associates, so you don’t consolidate. The question was to explain how the investment will be accounted for in the financial statement, which is to recognise the share of loss made and reduce the investment accordingly.
It’s a service that is simultaneously consumed as it is performed because the customer receives ongoing reports and data. If the customer got nothing it would be a point in time. That point is was v important. As per IFRS15 the single performance obligation for the service and licence is recognised over time not at a pint in time.
Thought it was straight forward lol.
The last part of question one I was sure asked for goodwill to be calculated as at 20×7 unless I’m remembering the wrong question.
The customer could make the decision to exit the service contract at any time if the data showed negative results
Apologies for my tone graceola, sincerely hope we all pass. I hate the pressure of these.
I’m sure you have 🙂
I think the point I was trying to make was the customer didn’t have to take the licence so the decision is made via the performance of the service contract. The information in the service contract is consumed over time as it is performed over the six months period. If it’s recognised on the granting of the licence how do you recognise revenue for customers who do not take a licence as nothing is performed?
Happy if I’m wrong as if I’ve failed will help me to improve next time
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