[wgk]

Passed (50%) first attempt. Only used OpenTuition – literally knew all OT material. Plus, read the Conceptual Framework a handful of times. And took OT advice on covering Cash Flow Statements!!

[wgk]

🙂 🙂

[wgk]

Me again!

IAS 16 – Revaluation decrease

What happens if Panama does not elect (as is allowed per IAS 16 paragraph 41) to transfer the surplus of $0.55m?

Would this therefore be the situation?

SFP
– PPE 8.00
– OCE 0.15

SPLOCI
– DEP (1.75)
– Reval. Loss / imp (4.25)

Thanks.

[wgk]

Thanks 🙂

[wgk]

On further clarification please.

IAS 16 paragraph 41
“The revaluation surplus included in equity in respect of an item of property, plant and equipment may be transferred directly to retained earnings when the asset is derecognised. This may involve transferring the whole of the surplus when the asset is retired or disposed of. However, some of the surplus may be transferred as the asset is used by an entity. In such a case, the amount of the surplus transferred would be the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset’s original cost. Transfers from revaluation surplus to retained earnings are not made through profit or loss.”

Based on this, would I be correct is stating that the OCE (SFP) would be reduced by $1.59m and RE (SFP) would be increased by $1.59m?

Therefore:

**31/12/2015**

SFP
PPE 89.41

RE (X + 1.59) where X is other retained earnings
OCE 25.41

Thanks again for you advice.

[wgk]

Thanks

[wgk]

Thanks

[wgk]

That is pretty neat when the $5.2 million is just an accounting adjustment! 🙂

[wgk]

Would this imply that $5.2 million is therefore available for distribution of dividends!?

[wgk]

As per notes related to video IFRS 5 – NCA – HFS Introduction

“Non-current asset held for sale is valued at the lower of the carrying value and fair value less costs to sell. Any reduction in value is recorded as an impairment through profit or loss.”

And as per the video – 6:00-6:10 (IFRS 5 – NCA – HFS Introduction)

“I suppose unless it has been previously revalued in which case the impairment will go to where that revaluation has been previously stored-up”.

So based on that, the $300,000 should be taken first to the revaluation reserve??

[wgk]

Thanks again.

[wgk]

Excuse me on persisting on this issue.

As per Para. 48 of IAS 21:

“On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognised in other comprehensive income and accumulated in the separate component of equity, shall be reclassified from equity to profit or loss (as a reclassification adjustment) when the gain or loss on disposal is recognised …”

According to Para. 48, the exchange differences (with respect to the SFP) should be accumulated in OCE and not GRE. So regarding example 3, GRE should be $122m? And whatever the ‘exchange rate losses’ are, they should be recognised in OCI and accumulated in OCE.

Thanks for your patience 🙂

[wgk]

TYPO ALERT – My previous reply had SPL instead of SFP 🙁

From the perspective of SPLOCI, Gain or Loss to OCI, Therefore from the perspective of SFP, should Gain or Loss go to OCE?

[wgk]

From the perspective of SPLOCI, Gain or Loss to OCI, Therefore from the perspective of SPL, should Gain or Loss go to OCE?

[wgk]

Ref. you reply on August 28, 2021 at 8:44 am

But only for individual company accounts!??

[wgk]

Thanks

[wgk]

Thanks and have a great week.

[wgk]

Excuse me again, so is this therefore correct?

Dr Group profit or loss 32
Dr NCI 1
Cr Goodwill 28
Cr Net assets 5

As compared to the answer in the notes:

Dr Group profit or loss 33
Cr Goodwill 28
Cr Net assets 5

Thanks in advance.

[wgk]

very wise comments.

[wgk]

Finally – that paper took such effort to pass. Lost count of how many times had to sit it :-)). One to go – SBR.

[wgk]

Thanks – much appreciated.

[wgk]

Thanks for the advice. Actually I am just completing the ACCA CertIFR modules – then will attack the papers.

[wgk]

3 weeks

[wgk]

Bingo – it worked .
Thanks

[wgk]

Correction from my side:

Typos:

pp84 – “… building is sold for the following:” – the $10 million should read $11 million

pp154 – second Answer 6 (Sale and leaseback (1)) should read Answer 7

pp155 – Answer 7 (Sale and leaseback (2)) should read Answer 8

[Author]

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