[geteveryone]

Yes, apologies. Credit Other equity reserves, not share capital.

[geteveryone]

I’ve now seen it come up re purchase of a building from a shareholder. The scenario wanted you to distinguish whether the shares were purchased in their capacity as shareholders or as suppliers. As it was for a building, the transaction was obviously a SBP.

[geteveryone]

You account for the liability or equity at the outset and adjust it year-on-year for any changes to the number of shares expected to vest.

ie. If equity-settled share-based payment, you would dr p&l expense, credit share capital at the end of year 1.

If cash-settled share-based payment, dr p&l expense, credit liability (note with cash-settled, you revise the fair value in each period) at the end of year 1.

[geteveryone]

Adjustments seem to be 1 mark for the working and 1 mark for inclusion in the calculation of the line item (ie. adjusting the consolidated admin/distribution/finance expense).

[geteveryone]

When the buying entity has no intention of receiving the goods, or the contract denotes that payment can be settled net, then this indicates that the item is a derivative.

Share based payment specifically requires the delivery of goods and services, and, to date, I’ve only seen it come up in exam questions with regard to share-option or share appreciation rights for employees (note the distinction between the two being that the former are equity-settled and the latter cash-settled).

[geteveryone]

Damn, that’s where I made my mistake. I knew it looked daft.

Had the working capital outflows in year 1-4 and the inflow in year 4, too.

Ugh.

[geteveryone]

In question 1, did you all reclaim the working capital? If so, did you add it as a cashflow into year 4 or 5?

I put 4, but I’ve been questioning it since… seems strange because there is then a working capital outflow and inflow in the same year.

[geteveryone]

<cite> @kased58 said:</cite>
Totally messed up in the occupational pension scheme.Didnt realise that employer’s contribution also utilises the maximum allowance!!!!!!!But thank God ACCA marks per entry and would not actually penalize the whole workings…

In relation to the share’s qsn i presume it was a gift btn connected persons,so i took the open market value i.e 6.4x-2.4x =10600 and got 2650 shares…..hop it pays.

Yeah, it was a technical gift, but they both elected for rollover relief, so the excess (6.4-4.0) wasn’t immediately chargeable in the 12/13 tax year.

[geteveryone]

<cite> @oldc02 said:</cite>
Yes I put it as restricted too as all of the sale proceeds were not re-invested. I think I got a chargeable gain of £12,000 on warehouse two.

Likewise.

<cite> @atab said:</cite>
But it didn’t say how many were sold….it just asked us to see how many could be sold without incurring a gain…..therefore I took the full amount plus the annual exemption and divided it by the selling price to see how many could be sold without incurring a gain….

Hmm, I just read that there was mention of ‘market price’ in the question, which I apparently totally overlooked. I based my answer on the £4/share selling price. Just got to wait and see now. I’d look up the answer in my notes, but I’m busy panicking about F7.

[geteveryone]

<cite> @atab said:</cite>
I calculated it as 10000 x 2.4 = 24,000 cost
annual exemption = 10,600
24,000 + 10,600 = 34,600
34,600 / 4 = 8,650 shares (in order to avoid incurring a gain)

The cost isn’t 24,000 though, it’s 2.4 X No. of shares sold.

The cost would only be 24,000 had all 10,000 shares been sold.

[geteveryone]

<cite> @waleedansari said:</cite>
I got 6625 shares

Yeah, I also got 6625 shares.

2650 is just 10,600/4, so it doesn’t take into account the actual gain.

ie. Proceeds
(Cost)
_____
Gain
(AE)
_____
Chargeable.

I don’t know if 6625 is right, but I used algebra to calculate the answer.

4X – 2.4X – 10600 = 0

So far, I know I mucked up the Pension Scheme portion of question 1 and I also didn’t realise Rhonda’s BSI was gross, so I wouldn’t be surprised if this was wrong – pays to read the question attentively.

[geteveryone]

<cite> @wajiman said:</cite>
they were not to be deducted as it was said that he has reached his limit allowed for the year and so it would be considered as an income

So in the income tax comp, £28K would have been considered income?

I hadn’t considered that the occupational scheme would utilise the annual allowance, too. Wasted marks there, then.

Actually, I don’t think the wording of the question specifically mentioned that he paid £50K into a private pension scheme, just that he maxed out his allowance. So, presumably he paid £22K into the private pension on top of the £28 into the occupational? So that there was no annual charge?

Either way, I messed it up.

[geteveryone]

For UK Q1, when calculating NICs were we to deduct the occupational pension contributions first?

I did that originally, then second-guessed myself…

Felt that it went OK in general. There were a few curveballs in the presentation of questions, etc, but it wasn’t a nightmare.

[geteveryone]

@captmario said:
Advertisement is mostly (if not always) considered Invitation to treat, i though it was invitation to treat, can someone clarify? im quite sure it was invitation to treat.

I thought that initially, and wrote out my answer assuming it was an invitation to treat, then started second-guessing myself (given it said “accept this offer”). I’m sure I’m wrong, unfortunately, and it was an invitation to treat. Fairly sure I’d have been guaranteed a pass if I’d got it right. Damn…

[geteveryone]

I thought it went alright. Hadn’t studied insider trading, so that question didn’t go particularly well.

With regard to Q.8, about the £1,500 rug, was it actually an offer or just an invitation to treat? Given the specific wording, I took it as an actual offer and now I’m doubting myself…

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