Last Minute Revision Flashcards
(169 cards)
1
Q
When to recognise provision?
A
When it’s a contractual or legal obligation
> 50%
Can be measured reliably
2
Q
Restructuring provision?
A
Detailed plan for restructuring
Communicated to interested aprties
3
Q
What is a constructive obligation?
A
an obligation that arises from an entity’s actions where there is no formal agreement, but the entity has created a valid expectation in another party that it will discharge a duty
4
Q
Goods in transit double entry?
A
Debit: inventory
Debit: Payables (CL)
Credit: receivable
5
Q
What must be tested annually for impairment?
A
Indefinite life and assets not yet completion
6
Q
What is only recognised as an asset in IAS 38?
A
Development coists
7
Q
What can’t be included in a restructuring provision?
A
Training costs relating to an ongoing business
8
Q
Events that affect going concern?
A
Are always adjusted
9
Q
Is staff training a valid provision?
A
No
10
Q
If another plant is acquired udring the year?
A
That plant is depreciated separately
11
Q
Amount recognised for a valuation list in consolidation?
A
What it was at acquisition
12
Q
How are performance obligations allocated to the transaction price?
A
Transaction price allocated to eachs eparate performance obligation with reference to standalone price
13
Q
Significant financing component calculation in year 3 for $10000, offering interest-free credit for a three year period? Provision is 5%
A
10000 * 1/1.05^3 = 8638
14
Q
If there is a technical support package for over two years?
A
Recognise revenue over two years, not when determining the transaction price
15
Q
How is technical support package for over two years?
A
As deferred income split into current liability and non-current liability
Also recognise months used in revenue
16
Q
Allocating revenue for a service support package over two years? (double entry)
A
Debit: Bank/receivable
Credit: Revenue
Credit: Deferred income
Current deferred income (what is due in 12 months)
Non-current (the remainder)
17
Q
Gross profit in revenue?
A
Is deducted
18
Q
Gross profit margin in agent vs principal?
A
Not relevant
19
Q
When is the timing significant in the five step process for revenue?
A
In the revenue recognition stage
20
Q
George Co had 400,000 $1 equity shares in issue on 1 April 20X5. On 1 October 20X5, it issued 60,000 shares at the market price. Profit for the year ended 31 March 20X6 was $57,000?
How is it time apportioned?
A
400000 * 6/12
460000 * 6/12
21
Q
Is bonus issue prospective or retrospective?
A
Retrospective
22
Q
When there’s a bonus issue?
A
Calculate for the whole year
23
Q
Options calculation (dilutive)
A
Shares * exercise price/market price
24
Q
How is carrying amonut of disposal treated?
A
The same as depreciation, but not time apportioned
25
How is held for sale asset recorded in SFP?
Lower of FVLCOD and carrying amount.
Impairment loss (difference between) debit COS. No depreciation once held for sale
26
DEPRECIATION AFTER IFRS 5?
NO
27
What happens after there's an impairment?
Keep depreciating
28
Proceeds in SCF?
Always positive
29
Received in SCF?
Always positive
30
Paid in SCF?
Always negative
31
Bonus issue?
Added in the issue of shares working
32
Depreciation in cash flow
Positive
33
Investment income in cash flow
Negative
34
Interest expense in cash flow
Positive
35
Profit in operating expenses cash flow?
Negative
36
Loss in operating expenses cash flow?
Positive
37
Increase in current assets working capital in SCF?
Negative
38
Increase in current liabilities working capital in SCF?
Positive
39
Payment of lease liabilities working?
c/f - (b/f + RoU)
40
Dividend paid?
Financing and negative
41
When is cash in transit adjusted?
In receiver's books assuming they've recorded the cash
Debit: Cash
Credit: Trade receivable
42
Next step for cash in transit adjustment?
Remove intra-company balances (receivables and payables)
Debit: Payables
Credit: Receivables
43
Inventory in transit?
Debit: Inventory
Credit: Payables
44
Treatment of associate in CSFP?
Investment in associate working
Group share of post-acq profits treated the same as subsidiary in RE working
45
Investment in associate?
Non-current asset (debit)
46
What happens with non-monetary item?
Not retranslated at reporting date
47
Forex loss treatment in SPL (monetary)
Debit Forex loss
Total amount at end:
Debit payable
Credit cash
48
Do non-monetary items have a Forex gain/loss?
No as they can't be retranslated
49
Far value increase in non-monetary items (foreign exchange)
Credit OCI
50
If development expenditure criteria is met?
Must be recognised as an asset
51
Get selling price from the gross profit margin?
COS / gross profit margin
52
Calculate total revenue for multiple years?
Revenue in current year - revenue in previous years
53
Bill and hold arrangement double entry?
Debit: COS
Credit: Inventory
54
Consignment treatment?
Revenue and COS not recognised. Inventory remains in the books
55
When an entity is acting like an agent for the sale of products?
Does not recognise any inventory as there's no legal ownership
56
Additional warranty treatment?
IFRS 15. Standard warranty is IAS 37
57
If repurchase price greater than or equal to selling price?
It is a financing arrangement
58
If repurchase price less than selling price
It is treated as a lease
59
3 types of repurchase agreement
Forward
Call
Put
60
What is a forward (repurchase)
Entity has an bligation to repurchase asset
61
What is a call option?
Entity has the right to repurchase the asset
62
What is a put option
Entity must repurchase the asset if requested to do so by the customer
63
Servicing standalone price for allocating to transaction price?
Multiply the years
64
Warranties that customers pay for separately?
Accounted for under IFRS 15
65
Contingent liability treatment
Not included in FS, disclosed in notes
66
Gain/loss on equity investments
Adjusted for in retained earnings
67
IFRS 5 profit on disposal treatment in consolidation?
Credit to RE
68
Dividend received?
Credit investment income
69
Where is goodwill impairment concluded in consolidation?
Deducted from RE
70
Goodwill on disposal calculation
Goodwill - amount of goodwill impaired
71
Single entity disposal?
Proceeds - cost of investment (amount of consideration calculated in goodwill working)
72
Gross profit margin of 20% for PURP?
What's remaining * 20%
73
Mark up on cost of 15% for PURP?
What's remaining * 15/115
74
Goods in transit double entry
Debit Inventory
Debit Payables (B)
Credit Trade receivable
75
Dividends paid in consolidation?
Deducted in RE
76
What must be done with deferred consideration?
Discount must be unwound
77
Impairment of goodwill in CSPL?
Added in administrative expenses
78
Share capital to be recorded in CSFP?
100% P
79
Is investment in associate a non-current asset?
Yes
80
Impairment in CSPL measurement?
Always at FV
81
Cancel an intragroup loan?
Debit: Payable
Credit: Receivable
Debit: Group finance income
Credit: Group finance cost
82
FV increase in contingent consideration
Debit: Current liability
Credit: RE
83
Cash paid during the year in consideration? (not deferred)
Credit investment
84
Development expenditure in SCF?
Negative
85
FUCKING INTERNALLY GENERATED
Can't be recognised as an intangible asset
86
First payment due on commencement of the lease agreement (advance or arrears)
Means in advance
87
Calculate overstatement/understatement in PFY for leases?
Total expense to profit or loss - annually in arrears
88
What is included in total finance costs?
Cash interest, discount on issue, premium on redemption
89
Opening deferred tax liability? (debit or credit)
Credit
90
Are warranties included in cost of non-current assets?
No
91
Reversing depreciation for a residual value of 20%?
Carrying amount / (1 - 20%)
92
What must be the case for an investment property under IAS 40?
Must be reliably measured
93
Unrealised profit 20% of cost price?
Mark up is needed
94
Positive purchased goodwill treatment?
Test annually for impairment
95
FV of identifiable net assets and consolidation?
Can be used for FV of NCI
96
Cost of sales if margin is at 25%
75%
97
Goodwill impairment at FV treatment for retaiend earnings
Goodwill * impairment & * RE percentage
(Is a debit)
98
When should a company prepare a consolidated financial statement/
If it is a subsidiary
99
What qualitative characteristic does separate presentation allow?
Comparability
100
Criteria for an associate?
Significant influence, equity accounting
101
When does goodwill arise?
Value of business as a whole > FV of net assets acquired
102
What are examples of control a parent has in a potential subsidiary?
Power to direct relevant activities
Exposure or rights to variable returns
Ability to use power to affect the amount of returns
103
Examples of power?
Voting rights
Rights relating to management personnel
Decision making rights in a management contract
104
How are dividends paid on preference shares treated/
As a finance cost
105
Does group share of profit in RE apply to associates and subsidiaries?
Yes
106
Is impairment loss included in investment in associate working?
Yes
107
Assets held for use under research and development?
Tangible non-current assets
108
No goods in inventory?
Unrealised profit is not recognised
109
Is an enhancing cost included in cash flows?
No
110
What is meant by must be shown separately in the income statement?
MUST HAVE IT'S OWN LINE. NOT COMBINED WITH OTHER LINES
111
Gross profit margin of 25% in servicing?
100/75
112
Removing an accounting policy affects which characteristic?
Comparability
113
Asset on disposal calculation?
Proceeds + carrying amount - original cost
114
Where is a contingent liability recorded in consolidation?
In consolidation
115
IS FUCKING PROFIT TIME APPORTIONED WHNE IT SAYS ACCRUED EVENLY?
YES
116
Payable before commencement of lease? (arrears or advance)
In arrears
117
Cumulative gain in FVTOCI?
Does not reclassify to SPL
118
Dismantling cost?
Discount to PV
119
A product, PeBo, held at another warehouse was measured at cost, $460,000, as at 31 March 20X7. In April 20X7, 70% of this inventory was sold for $280,000 on which Waxworks Co s’ sales staff earned a commission of 15% of the selling price.
Calcualte carrying value of inventory?
280000/70% - 15% commission
120
Hold shares for trading (FVTPL or FVTOCI)?
FVTPL
121
Election hadn't been made (FVTPL or FVTOCI)?
FVTPL
122
Election has been made (FVTPL or FVTOCI)?
FVTOCI
123
How are assets measured in consolidation?
At historic cost
124
Mark up cost on inventory of 30%?
Same as consolidation
Inventory amonut/130
125
Settlement discounts and trade discounts in NRV?
Settlement discounts not included
Trade discounts are
126
Comparability examples?
When an entity changes accounting policy and the disclosure of accounting policies
127
Removal of disposal?
Allows company to repay debt
128
Long-term investment (FVTOCI and FVTPL)?
FVTOCI
129
Operating lease calculation?
Operating lease rental - cash back incentive received
130
Convertible loan notes used?
Liability component * discount rate * post-tax added
131
Ways to reverse impairment loss?
An impairment loss can only be reversed if change in estimate used to determine recoverable amount
132
FVTOCI and amortised asset?
Intiial amount + transaction costs
133
FVTPL asset?
Initial amonut
134
Amortised liability?
Proceeds received - transaction costs
135
Liability FVTPL?
Proceeds received
136
Short-term investment (FVTPL)?
Held to trade
137
Medium-term investment (FVTOCI)?
Expected to be held until maturity
138
Lease liabiltiy initial measurement?
Penalty + fixed lease payments
139
Restructuring provision?
Debit RE
140
Bargain purchase?
Debit SPL
Credit RE
141
FV gain in IP in consolidation?
Debit PPE
Credit RE
142
In a restructuring provision?
Redundancy is recognised
143
Tax base of a liability?
Carrying amount - deductible amount in the future
144
New accounting policy for current year?
Apply new policy
145
New accounting policy for comparative years?
Restate using new policy
146
New accounting policy for earlier years?
Prior-year adjustment in retained earnings
147
Cost of opening facility and cost of introducing new product/service?
Not included in IAS 16
148
One asset revalued?
All assets in class must be revalued
149
Goodwill arising as a result of business combination?
Recognised positive goodwill in group accounts
150
Both parteis have to be committed for a contract to be carried out?
Yes
151
When is discounting not required when recognising the transaction price?
When it is less than one year
152
Non-cash consideration (determining transaction price)?
Measured at FV
153
Variable consideration (determining transaction price)
The two most likely outcomes
154
Deferred income recognition?
Debit Cash
Credit Deferred income
155
What are dividends, interest debt, changes in value of investment in group accounts?
Variable returns
156
Grant repayment?
An accounting estimate
157
How are repayment of assets recognised?
Increasing the carrying amount of asset
Reducing the deferred income
158
Testing of a product?
Is recognised as an asset
159
Goodwill arising on consolidation treatment for impairment?
Impairment is tested annually
160
Is substance always > legal form?
Yes
161
How is contingent consideration measured?
At FV at acquisition date
162
Internally generated intangible assets in consolidation?
Recognised as non-current assets
163
Restructuring plan and future losses in consolidation?
Not recognised
164
NCI at disposal calculation?
NCI at acquisition - % difference in net assets
165
Goodwill impairment test?
Must be annual
166
Future operating losses and provision
Not recognised for provision
167
Self-insurance and provision?
Not recognised for provision
168
Discontinued operationc riteria?
Separable
Distinguishable
Single coordinated plan
169
Customer list unable to value?
Included in goodwill
