3

Question 1

Provision of free services from parent to sub is…

Answer 1

a related party transaction

Question 2

A change in depreciation method is a…

Answer 2

change in accounting estimate

Question 3

Accounting policy change

Answer 3

retrospective change, impacts opening balances and PY numbers

Question 4

Accounting estimate change

Answer 4

Prospectively, depn the CA at the date by the new method

Question 5

What is the purpose of highlighting RPT?

Answer 5

1) increases transparency

2) draws attention to performance influenced by existence/transactions w/ related parties

Question 6

Goodwill, IFRS

Answer 6

1) not amortised but annual imp review

2) not changed after acqn if change in contingent consid occurs

Question 7

Goodwill, UK GAAP

Answer 7

1) amortised over useful life (max 10yrs)

2) if probable and reliably measured change in contin consid, recalc using new FV

Question 8

SOCIE: b/f NCI

Answer 8

NA at acqn
+ post acqn NA
+ share of imp (if FV)

Question 9

How does addition of a sub impact SOCIE?

Answer 9

Add figure in NCI col only

Question 10

Cashflow: Operating activities also includes…

Answer 10

~ loss on disposal (add back)
~ scrapped equipment (add back)
~ finance cost (add back)

Question 11

Cashflow: Financing activities, payment of lease liability

Answer 11

Payment - interest

Question 12

How are deferred cash and shares treated in goodwill calc?

Answer 12

Shares: use value at acqn
Cash: recog provision + unwind

Question 13

Distributable reserves

Answer 13

ability to pay div depends on distributable profit: accumulated realised profit less accumulated realised losses

Question 14

Distributable reserves: Public Co restrictions

Answer 14

~ cannot pay div if net assets below total share capital and distributable reserved
~ preserves credit buffer

Question 15

Borrowing costs

Answer 15

~ that are directly attributable to acqn, construct, product of qualifying asset are capitalised
~ capitalisation starts when expenditure is incurred

Question 16

Qualifying asset (borrowing costs)

Answer 16

substantial time to get ready for intended use

Question 17

Foreign exchange translation

Answer 17

~ initial recog at delivery (R+R transferred)
~ recorded in functional currency
~ retranslation gain recog in P/L

Question 18

If there is no reval surp left, recog fall in value as…

Answer 18

an expense in the P/L

Question 19

Assets are held at…

Answer 19

their recoverable amount, higher of:

a) value in use
b) FVLCTS

Question 20

Should trademarks be recognised at acqn of sub?

Answer 20

Yes, only internally brands shouldn’t be