Extras Flashcards
(7 cards)
Which standard deals with errors in the prior period
How should they be dealt with
IAS 8
If material they should be corrected retrospectively
What happens when an item of PPE is now leased out
This is classified as a change in use and moved to investment property under IAS 40
The property is revalued on the date of change of use and any difference is recognized as a revaluation gain under IAS 16
Then any additional costs are capitalised into the investment property under IAS 40
Are professional fees allowable costs to be capitalized under IAS 40
Yes
What are the two methods of treatment of an investment property under IAS 40
What are the two main differences
Fair value method
Cost methods
Fair value method - any gains go to P/L
And no depreciation is charged
Under IFRS 10: what factors give rise to control over another entity
IFRS 10 states that you must have all of:
1) power over the investee
2) exposure, or rights, to variable returns from its involvement with the investee
3) ability to use its power over the investee to affect the amount of the investors returns
What steps do you take to adjust for a PURP where the parent is the seller
1) remove any intragroup transactions by deducting sales value from both consolidated revenue and consolidated cost of sales
2) calculate the profit that was made on the items remaining in inventory, this is the PURP
3) PURP will be added back to the cost of sales of the seller and removed from consolidated inventories (will also affect retained earnings)
For a foreign subsidiary consolidation what are the different workings that you would need
1) translation of foreign subsidiary financial statements
2) goodwill
3) consolidated retained earnings
4) NCI
5) translation reserve
6) exchange differences on retranslation of subsidiary (only if asked to prove the ER movements)
