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| Section | Objectives |
|---|---|
| Interpretation of Financial Statements | - Performance evaluation - Financial ratio analysis |
| Financial Statements | - Preparation and presentation of financial statements - Statement of cash flows |
| Financial Reporting Framework | - Conceptual framework of financial reporting - Regulatory environment and standards (IFRS overview) |
| Group Financial Statements | - Business combinations - Consolidated financial statements - Associates and joint arrangements |
| Specialised Financial Reporting Topics | - Events after reporting period - Changes in accounting policies and estimates - Financial instruments |
ST acquired 75% of the 2 million $1 equity shares of CD on 1 January 20X3, when the retained earnings of CD were S3,550,000. CD has no other reserves.
ST paid $5,600,000 for the shares in CD and the non controlling interest was measured at its fair value of S1,400,000 at acquisition.
At 1 January 20X3, the fair value of CD's net assets were equal to their carrying amount, with the exception of a building. This building had a fair value of $1,000,000 in excess of its carrying amount and a remaining useful life of 25 years on 1 January 20X3.
At 31 December 20X5, the retained earnings of ST and CD were $8,500,000 and $5,250,000 respectively.
What is the value of retained earnings that will be presented in the consolidated statement of financial position of ST as at 31 December 20X5?
Correct Answer: B 🗳️
Entity A entered into a 3 year operating lease on 1 April 20X3. The rentals are £5,000 a year payable in advance with an additional payment of $1,800 payable on 1 April 20X3.
The rental expense to be included in the statement of profit or loss for the year ended 31 December
20X3 will be:
Correct Answer: D 🗳️
Which THREE of the following would determine the functional currency of an overseas subsidiary in accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates?
Correct Answer: A,C,F 🗳️
A convertible bond with a nominal value of $100 can be redeemed at par in 5 years' time or be converted into 1 new equity share for every $5 of bond held.
The current equity share price is $3.50 and it is anticipated that this will grow at a rate of 7% per year.
What is the value of the conversion option of the bond in 5 years' time?
Give your answer to two decimal places.
$ ?
Correct Answer:
98.18, 98.17, 98.179, 98.178
A group presents its financial statements in A$.
The goodwill of its only foreign subsidiary was measured at B$100,000 at acquisition. There have been no impairments to this goodwill.
Exchange rates (where A$/B$ is the number of B$'s to each A$) are as follows:
The value of goodwill to be included in the group's statement of financial position in respect of its foreign subsidiary for the year ended 31 December 20X4 is:
Correct Answer: C 🗳️
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