[dookhan12]

Hi, I’m still unclear of the geographical information which needs to be disclosed.

Specifically, the BPP WorkBook says:

Geographical areas:
– external revenue
– non-current assets

By:
– Entity’s country of domicile
– All foreign operations (subdivided if material)

Can you clarify?

Thank you.

[dookhan12]

Good Night,

Thank you for that clarification! 🙂

[dookhan12]

Good Night,

I’m having some problems when posting queries. So I would have typed that same query first and then click on Submit but then it returned to the list of all queries without mines. As such, I thought the query didn’t go through and I typed it over again. Sorry about that though.

Thanks.

[dookhan12]

Good Night,

Thank you for your help! 🙂

[dookhan12]

Good Night,

One final question in relation to Q1, I’m confused as to which accounting standard will the abandoned asset therefore be accounted for under?

Thank you for you help! 🙂

[dookhan12]

Also, I don’t understand this working in the examiner’s solution.

12,692,225 = 12,250,000x – 105,350
12,250,000x = 12,692,225 + 105,350
so that x is US$1·0447 = CHF1.
Or
12,688,550 = 12,250,000x – 105,350
12,250,000x = 12,688,550 + 105,350
so that x is US$1·0444 = CHF1.

What figure is the examiner trying to calculate? What is the logic behind the calculation?

Thank you.

[dookhan12]

Thank you.

[dookhan12]

Sorry. I meant BPP.

[dookhan12]

Hi! I don’t want to sound like a nag but I haven’t seen you upload the lectures on business valuations yet. What going on there? When can we expect them?

Thanks!

[dookhan12]

Ohh. Thank you so much! A blessing indeed. 🙂

[dookhan12]

Thanks!

[dookhan12]

Don’t worry… Thanks.

[dookhan12]

Nope I didn’t.
Now I see where I went wrong.

Thanks for clearing that up!

[dookhan12]

Yep!

One final thing…

Mr P has a 25% shareholding in Entity A.
Mr P has a 30% shareholding in Entity B.

Mr P is able to exert significant influence over Entity A and Entity B.

Required:
Explain whether or not Entity A and Entity B are related parties.

Is this answer correct?

A related party is a person or entity that is related to the entity that is preparing its financial statements.

If Entity A were the reporting entity, Mr A would be a related party because he has the ability to exert significant influence over the reporting entity.

If Entity B were the reporting entity, Mr P would be a related party because he has the ability to exert significant influence over the reporting entity.

However, the answer given in Kaplan Study Text was:

Mr P is a related party of both Entity A and Entity B as he is able to exercise significant influence over each entity.

Mr P does not control either Entity A or Entity B. Therefore, A and B are not related parties.

The last sentence above was different from my answer. Why did they make such statement that A and B are not related parties?

When answering questions, aren’t we not supposed to identify each reporting entity and then determine how other entity’s or persons results in a related party as this is in line with the definition of a related party (a person or entity that is related to the reporting entity)

I’m confused there…

[dookhan12]

One more thing…

Why is it important to disclose related party transactions?

[dookhan12]

Thanks for clearing that up!

I really do feel sorry for the UK guys. Both IFRS and UK GAAP 🙁

Bye!

[dookhan12]

Yes.

Thank you!

[dookhan12]

Thank you so much….

Have a blessed day! 🙂

[dookhan12]

Thanks!

I’m glad to see that I am starting to finally be able to answer full questions and apply my knowledge as much as possible in this paper.

[dookhan12]

Thank you! Now I understand better.

[dookhan12]

OMG! Thank god!
Thanks so much for helping me out! I feel much better and prepared for the exam now. 🙂

[dookhan12]

Oh Thank you! What a relief!
Now I feel confident to do a written question on overtrading in the exam.

Thanks! 🙂

[dookhan12]

Yes. I do understand now.

Thanks a million! 🙂

[dookhan12]

Hello… I now understand that question but I’m having a bit of problem with Dec 2012 #4 (b).

This is what I did.
Expected profit= $50 ($250-$200)
Stage of completion based on the sales basis= 64% (160/250*100)
SOPOL figures:
Revenue $160 (64%* $250)
COS ($128) (64% * 200)
Profit $32

SOFP figures:
Gross amounts due “to”/”from” customers is based on whether we have a Dr or Cr balance on the Contract a/c.

Contract a/c
Costs incurred 145 DR
Revenue 160 DR
Progress billings 160 CR
COS 128 CR
Balance 17 DR
Therefore under current assets we will have gross amounts due “from” customers under construction contracts.

Receivables a/c
Progress billings 160 DR
Cash received 150 CR
Balance 10 DR

Based on the examiners answers I got the figures for the SOFP correct.
But I did not get the SOPOL figures right.
Instead I noticed he only showed what I think is the difference for the particular figure between both the cost and sales basis method.

Can you explain why he did that? Or Where did I go wrong?

Thanks!

[dookhan12]

I had a feeling I could use any two rates I wish. I just needed to clear it up for safety purposes in the exam.
I think I would follow the examiner and use his 10% and 5% from now on.

Thanks for clearing it up! 🙂

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