Consoldiation and Single Full List of Adjustments Flashcards
1
Q
Adding to share capital?
A
Credit
2
Q
Adding to share premium?
A
Credit
3
Q
Dividend paid treatment?
A
Deducted from retained earnings
4
Q
Depreciation and amortisation treatment?
A
Debit to COS or administrative expense
5
Q
Gain on revaluation treatment?
A
Credit OCI
6
Q
Loss on revaluation treatment?
A
Debit OCI
Debit excess in SPL
7
Q
Annual transfer of retained earnings treatment?
A
Debit RE
Credit Revaluation reserve
8
Q
Disposal treatment?
A
Proceeds - carrying amount = gain/ loss
Debit loss (to other income)
Credit gain (to other income)
9
Q
Final amount for investment entry? (IAS 40)
A
Debit SFP
10
Q
Gain on investment property entry (IAS 40)?
A
Credit gain on sale in investment property
11
Q
Recoverable amount?
A
Carrying amount - recoverable amount (SFP) = impairment (SPL)1
12
Q
Lease liability interest cost?
A
Debit finance cost
13
Q
Lease liability non-current?
A
Credit SFP
14
Q
Lease liability current? (arrears)
A
Credit SFP (Next year - previous year)
15
Q
Production costs of inventory?
A
Debit COS
16
Q
Opening inventory?
A
Debit COS
17
Q
Closing inventory?
A
Credit COS
18
Q
Impairment loss accounting treatment?
A
Debit COS
19
Q
Convertible loan note (equity component)?
A
Credit OCE
Debit Loan notes SFP
20
Q
Convertible loan note (finance costs (interest - cash coupon)?
A
Debit: Finance cost
Credit Loan notes
21
Q
IFRS 9 (Loan note not covnertible)
A
Debit finance cost
Proceeds + interest = Balance (SFP)
22
Q
IFRS 9 FVTPL
A
Initial:
Debit Investment
Credit Bank
Debit Transaction costs
Credit Bank
Subsequent:
Initial investment - amount at FV
Debit Expense
Credit Investment
23
Q
IFRS 9 FVTOCI
A
Initial:
Debit Investment
Credit Bank
Subsequent:
(FV - initial investment)
Debit Investment
Credit OCI (if gain)
24
Q
IFRS 9 amortised cost (financial assets)
A
Initial:
Debit Investment
Credit Bank
Subsequent:
Interest received (SPL)
c/f (SFP)
25
IFRS 9 amortised cost (financial liabilities)
Initial: Get net proceeds
Debit Bank
Credit Financial liability
Subsequent:
Finance cost (SPL)
c/f (SFP)
26
Government grant (Initial)
Debit Bank
Credit Deferred income
27
Government grant depreciation?
Debit deferred income
Credit other income
28
What is deferred income?
A credit account
29
What if grant becomes repayable?
Credit Bank
Debit Deferred income
Debit Expense
30
Dismantling cost?
Debit PPE
Credit Provision
31
Unwinding discount IAS 37?
Debit Finance cost
Creidt Provision
32
Virtually certain contingent asset?
Recognised in financial statements
33
Removal of goodwill from a single entity?
Debit revenue
Credit goodwill
34
Unrealised profit (when parent is seller to subsidiary)?
Debit retained earnings (parent)
Credit group inventories
35
Unrealised profit (when parent is seller to associate)?
Debit: Retained earnings
Credit: Investment in associate
36
Goodwill impairment
Debit RE & expense account
37
Share of profit for associate?
Credit retained earnings
38
PURP if it's for an associate?
Debit: PURP * associate %
39
Impairment loss if at FV in GRE (% of impairment)
Fv % of impairment
40
Impairment loss if at proportionate in GRE
Full impairment
41
Revaluation surplus?
Included in net assets (addition)
42
Unwinding of discount?
Debit retained earnings and finance costs
43
What is an example of a component of equity?
Revaluation
44
Pre-acquisition profit?
Included in retained earnings and recorded at acquisition date (profit earned before acquisition)
45
Post-acquisition profit?
Included in group profit for the year (profit earned after acquisition)
46
On 1 April 20X7, acquired 116 million of subsidiary's shares and issued at par one 10% $100 loan note for every 200 shares acquired ?
116 * (100/200) = 58
47
Associate sells goods to parent?
Debit Group share of profit to associate * %
Credit: Group inventory * %
48
Parent sells goods to an associate?
Debit: Group inventory * %
Credit: Investment in associate * %
49
Retained earnings at 1 October 20X2: 35000
Profit for year 30 Sep 20X3: 6200
RE to be included at acquisition if at 1 January 20X3?
35000 + (6200 * 3/12) = 36550
50
Retained earnings at 30 November 20X7: 69000
Profit for the year 30 November 20X7: 9000
RE to be included at acquisition if acquisition at 1 May 20X7?
69000 - (9000 * 7/12 post-acq) = 63750
51
Loss in retained earnings and deduction in carrying value?
Deduction from NGVA. Above carrying value and increase in RE are added
52
What is included in net assets
Share capital
Retained earnings (adjustments for PFY)
FVA
53
Unwinding of interest time apportioned?
Yes
54
Calculate a bonus issue?
Equity share capital * (bonus issue, e.g. 1/5)
55
What happens to gain on disposal?
Credit to other income
56
What happens to other income?
Added to operating profit / PBIT
57
Share of profit for associate?
Credit
58
Investment in associate/
Debit
59
Credit in cash and cash equivalents in TB?
Represents a bank overdraft, which is a current liability
60
Where is a provision in TB?
NCL
61
If a question contains a onerous contract?
A provision is entered for both NCL and CL
62
Bank loan treatment in SFP?
Recorded as NCL
63
A provision put in notes for current tax?
Put immediately as current tax in SFP. No further adjustments
64
Where is NCI in CSFP?
Put in equity
65
PFY figure used for? (PFY and equity shares same reporting date)
For adjusting the retained earnings figure in workings
In NVA: Deduct post-acq amount
This gets post-acq RE
In GRE: Add back pre-acq amount
66
Share of profit of associate?
Credit entry
67
Goodwill impairment?
Deducted from group retained earnings
68
What does charged to SPL mean?
Credit
69
Held for sale impairment?
Debit
70
Agency transaction double entry?
Debit Revenue
Credit COS
Credit other income
71
Profit to date with contract satisfied over time?
Work certified revenue (credit revenue) - costs incurred (debit COS) - profit
72
Contract asset working section C?
Revenue recognised - amonuts invoiced = Contract asset ( NCA SFP)
73
Trade receivable working?
Amonuts invoiced to date - amounts received from customers
74
Intangible asset with indefinite life?
Credit SPL
75
Investment property gain?
Credit investment income
76
Get total number of shares when equity share capital in notes is 75c and share capital in TB is 50c and
Amount in TB / 75c = 18m
Share capital: 18m * 50c
Share premium: 18m * 25c
77
Caddy Co acquired 240000 of 800000 shares of Paddy Co. What is the %?
240000 / 800000 = 30%
78
Parent despatched goods to subsidiary, haven't been included in the above inventory?
Parent => Sub
Debit Inventory
Credit Liability
Also take PURP as it's inventory
Debit RE
Credit inventory
79
Parent is due a receivable from subsidiary, this is equivalent to payable in subsidiary records due to goods in transit?
Sub => Parent
Debit Payables
Credit Receivable
80
Investment in associate calculation?
Cost of investment + profit in associate - loss in associate - impairment loss - dividend received
81
Where is a decomissioning provision included in consolidation?
Total adjustment is deducted in adjusting and reporting
Interest deducted in reporting
82
Where is unrecorded share of associate recorded?
In RE
83
Where is outstanding loan interest recorded?
In RE
84
First line in RE?
Parent's 100%
85
Contract asset?
Presented as current asset
86
How is a grant initially recorded?
As deferred income (a credit)
87
How is depreciation recognised in a grant?
Debit deferred income
Credit other income
88
Increase in provision?
Debit operating expenses
89
ALWAYS DONE BEFORE A FUCKING REVALUATION IN A FUCKING YEAR?
DEPRECIATION!!!!!
90
Lease liability in advance amortisation columns?
Balance b/f
Payment
Subtotal
Finance cost
Balance c/f
91
Lease liability in arrears amortisation columns?
Balance b/f
Finance cost
Payment
Balance c/f
92
Lease liability for the 20X2? (Arrears)
Calculate for 20X3
93
Calculate NRV?
(Selling price per unit - cost price per unit) * total number of units
94
IS A PURP FUCKING TIME APPORTIONED?
NO
95
FVA increase full debits and credits?
Debit RE
Debit NCi
Debit PPE
Credit Goodwill
96
What does net assets represent?
From the subsidiary which is consolidated into the company
97
What to look for in a FVA adjustment?
The difference between acquisition and reporting date. As it's depreciation, it's always time apportioned
98
Where is share of profit of associate recorded in CSPL?
Added to operating profit
99
Dividend paid treatment in consolidation?
Deducted from investment income * %
100
Right-of-use asset?
Lease liability + direct costs + amounts paid on commencement on date - incentives received
101
When are transaction costs included? IFRS 9
In FVTOCI
102
Release of grant?
Credit in SPL
103
Bill and hold arrangement double entry?
Debit cost of sales
Credit group of inventory
104
Bargain purchase?
Credited to SPL
105
WHEN ENTERING A SHITTING DEFERRED INCOME SPLIT INTO SFP?
Do current liability for a full year
106
Professional fees incurred during acquisition?
Debit to retained earnings
107
Revaluation surplus in NVA?
Positive amount in Acq and reporting date
108
Gain/(loss) on equity investments?
Subsidiary is included in NVA
Parent is included in GRE
Loss is debit (decrease)
Gain is credit (increase)
109
Is depreciation charged after asset is classified as held for sale?
No
110
Gain on disposal?
Credit other income
111
FVTPL entries
Debit: Investment
Credit Bank
Debit: Transaction costs (SPL)
Credit: Bank
Subsequent measurement:
Debit: SPL (if loss)
Credit: Investment (if loss)
112
FVTOCI entries
(INCLUDES TRANSACTIONS COSTS)
Debit: Investment
Credit Bank
Subsequent measurement:
Debit: Investment (if gain)
Credit: OCI (if gain)
113
Lease liability initial measurement?
PV, discoutned at rate implicit to lease
114
Right of use asset initial measurement?
Lease liability + other direct costs + payment at commencement date - incentives received
115
Are payments made annually in arrears included in right-of-use asset?
No
116
Rights transferred calculation?
FV-CV * (PV/FV)
117
Rights retained calculation?
Gain - transferred
118
Right of use asset in sale and leaseback calculation?
(Rights retained / Proceeds) * Carrying value
119
I buy a new i-Pat (!) for 600 and depreciate it over 4 years. The government likes the idea so gives me 50% towards the cost - udderly amazing I know.
How do I account for the i-Pat and its grant? (Approaches)
Deferred income or net off
120
(Discard)
(PV/FV) * CV
121
IFRS 5 NCA if FVLCTS < CA?
Credit PPE (e.g. 73000)
Debit NCA-HFS (e.g. 68000)
Debit Impairment (e.g. 5000)
122
Is residual value included in depreciation working?
Yes if straight line, but not in the original cost entry
123
Tax on a revaluation gain?
A debit entry (reduces OCI)
124
Is deferred tax liability a debit or credit?
Credit
125
Payments made in advance or arrears in RoU asset?
Not included in the initial measurement of RoU asset
126
P buys goods for 100 and sells them to S for 150. S has sold 2/5 of this stock? What is unrealised profit
150 - 100 = 50
50 * 3/5 = 30
127
If P buys goods for 100 and sells them to S for 150. S sells 4/5 of them to 3rd parties?
What is unrealised profit
150 - 100 = 50
50 * 1/5 = 10
128
WHEN DOES FUCKING IMPAIRMENT OCCUR?
CARRYING AMOUNT > RECOVERABLE AMOUNT
129
An example of contingent consideration?
A possible future payment of 1,000 if S’s profits increase by 10% each year (FV of this is 400)
FV recorded in the consideration
130
Cash treatment according to IAS 32?
Financial asset
131
Examples of an equity instrument of another entity?
Shares
Share options
Share warrants
132
Treatment of equity instrument of another entity IAS 32?
Financial asset
133
Example of a contractual right to receive cash or another financial asset from another entity?
Trade receivable
134
Treatment of contractual right to receive cash or another financial asset from another entity IAS 32?
Financial asset
135
Treatment of a derivative instrument standing at a gains?
Financial asset
136
What asset is most liquid?
Cash
137
What distinguishes equity from a liability?
There is no obligation to pay back investment
138
What is a financial instrument?
A contract that gives to both a financial asset of one asset and liability/equity of another
139
Financial asset to another entity examples?
Trade payable
Debenture loan
Redeemable preference shares
140
Treatment of a contractual obligation to deliver cash?
Financial liability
141
Treatment of financial asset to another entity?
Financial liability
142
Treatment of a derivative instrument standing at a loss?
Financial liability
143
Short-term lease expense double entry?
Debit: Lease expense (FS)
Credit: Accruals
Credit: Bank
144
Research costs
Debit SPL expense
145
Cash paid for an asset with an indefinite life?
Debit SPL expense
146
Asset with indefinite life?
Recognised in FSs but not amortised. If carrying amount > recoverable, it is impaired
147
Accrued expenses debit or credit?
Credit
148
What is expensed development?
Costs after research but before capitalisation
149
WHAT IS FUCKNIG IMPAIRMENT LOSS IN IAS 36?
Carrying amount - recoverable amount
150
What represents a change in accounting policy?
Where depreciation charges are included
Whether cost model or revaluation model is used
Change in inventory valuation method
151
What represents a change in accounting estimate?
Changes in depreciation estimates
Provision for warranty obligations
NRV of inventory
FV of assets or liabilities
152
Is impairment and depreciation the same treatment (e.g. debit or credit)
Debit
153
What is meant by relevance?
Relevant information capable of making difference in decisions made by users
154
What is meant by faithful representation?
Reflects economic substance faithfully and is therefore complete, neutral and free from error
155
What is meant by comparabiltiy?
Enables users to identify similarities and differences amongst items (e.g. change in accounting policy)
156
How can information be verified?
Model, formula or direct observation
157
What represents timeliness?
Balance between timeliness and provision of reliable information
158
What represents understandability?
Users who have a reasonable knowledge of business and economic activities
159
If income and expenses arise through change in current value?
It can be recognised through OCI
160
Bargain purchase treatment?
Credited to SPL
161
Impairment loss if impairment is at FV for group retained earnings?
% of impairment. Debit in GRE
162
Impairment loss if impairment is proportionate for group retained earnings?
Full impairment. Debit in GRE
163
Profit/loss from discontinued operation?
Proceeds - carrying amonut - selling costs
164
How is discontinued operations IFRS 5 shown in SPL?
Loss/profit from the operation deducted from continuing operations
165
Inventories purchased from suppliers (relevant ratio)
Payables
166
Dividend paid (CSPL)?
Deducted from investment income
167
FVA adjustment depreciation represents?
Movement negative under FVA both positive rep & acq
168
What always happens with PURP for sub?
Credit inventory
169
Goodwill impairment treatment in SPL/
Debit in SPL
170
What represents PURP?
What is left in inventory
171
Income tax refund credit and debit?
Credit SPL
Debit tax asset (current asset SFP)
172
Deferred tax liability double entry?
Debit: Income tax expense
Credit: DTL
173
When there are two loans for weighted average (IAS 23)?
Get weighted average % and then multiply by amount of loans time apportioned
174
Specific borrowing calculation (IAS 23)?
Expenditure (capitalised SFP) - investment income (credit SPL)
175
When are borrowing costs capitalised? (specific borrowing)
When they are capitalised
176
When is investment income recognised? (specific borrowing)
Before capitalisation
177
Does initial measurement of IP include transaction costs?
Yes
178
Calculate value in use with cost of capital of 8% year 1 and 2?
Cash flow * 1/1.08
Cash flow * 1/1.08^2
179
Cost of inventory manufacturing overheads based on?
Normal
180
Original cost (IAS 2)
Purchase price + costs bringing inventory into its present condition *e.g. (labour, materials, manufacturing overheads)
181
NRV (IAS 2)
Selling price - costs we might incur in the future (e.g. modifications, selling costs (e.g. advertisement))
182
How to record closing inventory (IAS 2)
Debit: inventory
Credit: COS
183
Provision for deferred tax (e.g. deferred tax liability)? (plus potential revaluation)
It is added to the current tax
(revaluation is deducted from this figure)
184
Provision for income tax?
Added to current tax
185
If cost > NRV?
There is a loss. NRV should always be higher
186
Inventory write down calculation?
NRV - cost
Debit: COS
Credit: inventory
187
Costs to complete?
Deducted from NRV
188
Settlement discounts and NRV?
Not deducted
189
Trade receivable balance?
Amounts invoiced - amounts received from customers
190
IAS 33 golden rule for rights issue
Market price/theoretical price
191
Cost in IAS 2 (before or after)
Before year end
192
NRV in IAS 2 (before or after)
After year end
193
Consolidated profit to single entity profit debits and credits?
Credits deducted and debits added
194
Is share for share exchange included in deferred consideration?
No
195
Net asset turnover?
Revenue / (Equity + Debt)
196
Goodwill impaired at reporting date?
Debit entry
197
Overstatement in opening inventory?
Increases COS and reduces gross profit
198
Do qualify as an associate?
20 to 50% and significant influence
199
If 50 cents share cpaital?
Convert in the NVA working
200
On acquisition the retained earnings of Weston showed a deficit of $10,000 (For NVA)
Sub RE at reporting date + 10000
201
A parent sold goods to its wholly owned subsidiary for $1,800 representing cost plus 20%. At the year-end two-thirds of the goods were still in inventory?
Selling price: 120%
Markup: (20%)
Cost: 100%
202
Is residual value included in revised amount (e.g. revaluation)?
Yes
203
What happens when management intend to use asset for more than a year?
There is no provision
204
Only underlying assumption for FSs?
Going concern
205
When should a provision only be made (for a contract?
It is onerous
206
Provision for trading losses? (Consolidation)
Excluded from consolidation
207
Provision for reorganisation costs
Included in consolidation
208
What is an onerous contract?
Recognised as a provision
209
Is warranty a legal obligation?
Yes
210
Intangible asset in net assets?
Positive amount, contingent liability is negative
211
Future operating losses?
No provision
212
Present value of decomissioning cost?
Added to purchase cost of equipment to get the total cost
213
What represents finance income?
Effective rate of interest
214
An equity share which is not redeemable and has no restrictions on receiving dividends
Equity
215
A preference share that is redeemable for cash at a 10% premium in five years’ time
Non-current liability
216
A loan note that is redeemable at par in seven years’ time
Non-current liability
217
An irredeemable loan note that pays interest at 7% a year
Non-current liability
218
Is deferred tax always a provision?
Yes
219
If question asks for balance on the deferred tax account
Opening balance is not relevant
220
Taxable temporary difference charge or credit?
Charge
221
Allocating the transaction price the same process as allocating goodwill?
Yes
222
Providing support services cost for more than a year?
Calculate two years for one year
223
Five equal annual payments (in a lease)
Payments in advance
224
Can goodwill be an intangible asset?
Yes
225
Assets held for research and development?
Are tangible non-current assets
226
What are treasury shares?
Equity
227
Subsequent measurement for FVTOCI?
Shares * FV price
Not including transaction costs
228
When calculating equity dividend?
if TB states 20c, always calculate to the $1.This is dividend paid, so debit in RE
229
Included in OCI for FVTOCI?
Gain on disposal
Increase in FV
230
Bill and hold arrangement double entry?
Debit cost of sales
Credit inventory
231
Prior period adjustment?
Debit RE (prior period)
Debit SPL (current year(
232
Is preference dividend deducted to get PFY?
Yes
233
Loss on inventory?
Deducted from closing inventory
234
Faulty goods returned to suppleir?
Treated same as revenue in an inventory calculation
235
If it states (work certified)?
This represents the revenue, not total contract
236
If investment property amonut needs correcting in TB?
Debit: Accumualted depreciation
Credit: depreciation
237
Provision reversal double entry?
Credit SPL
Debit Provision
238
Profit in contract?
Work certified revenue - costs to date
239
Sales of $7.8 million were made at a mark-up on cost of 30%
What is the markup cost?
7.8 / 1.3 = 6
240
An example of a present obligation?
Probable outflow
241
A provision for 100000 for year ended 20X4 was settled for 120000 during 20X5. Accounting entry for 20X5?
Debit provision 100000
Debit SPL 20000
Credit cash 120000
242
Investment gain (in consolidation)
Credit RE
243
Full impairment of goodwill?
Debit RE
244
Cash -in-transit adjusted for the parent?
Has no affect on current assets
245
If liabilities are overstated in consolidation?
net assets are understated and therefore goodwill is overstated
246
Depreciation an overhead for inventory?
Yes
247
Can goodwill be revalued?
No
248
Does historical cost overstate gearing?
Yes
249
Where is IFRS 5 asset put in FS?
In financial statements
250
IFRS 5 calculation
Lower of FVLCOD and carrying value - Depreciate to date of reclassification (this is lower of FVLCOD and carrying value)
251
Provision double entry?
Debit: SPL
Credit: Provision
252
Fully subscribed rights issue of 1 for 4 (fraction used)?
1/4+1
1/5
253
Cumulative gain for FVTOCI treatment?
Don't reclassify to SPL
254
What is a deposit?
A current liability
255
How to determine a capital expense?
It is separately identified as a component part
256
Correct overstatement of inventory?
Debit RE
Credit COS
257
Is discounting time-apportioned?
No
258
When calculating using reducing balance method?
Always do one year at a time
259
NCI in CSPL?
Included at the bottom
260
Profit attributable to owners of the parent CSPL?
Total profit - NCI
261
SHARE OF PROFIT OF ASSOCIATE TIME APPORTIONED?
NO
262
Where is goodwill impairment included?
Included in reporting column for NVA
263
Is tax charge included for associate in CSPL?
No
264
Dividend received debit or credit?
Credit
265
Goodwill impairment in CSPL?
Debit administrative expenses
