21/10/2024 Tài liệu ôn thi chứng chỉ IFRS

ĐỀ THI DIPIFR THÁNG 12/2018 CÓ LỜI GIẢI CHI TIẾT (DIPIFR PAST EXAM ON 12/2018)

Đề thi DIPIFR tháng 12 năm 2018 tập trung vào việc đánh giá khả năng áp dụng các chuẩn mực kế toán quốc tế, bao gồm IFRS 15, IFRS 9 và IFRS 16. Nội dung thi yêu cầu thí sinh không chỉ hiểu biết lý thuyết mà còn có khả năng phân tích và lập báo cáo tài chính trong các tình huống thực tế.

Dưới đây là chi tiết đề thi DipIFR tháng 12 năm 2018 và lời giải chi tiết!

Cấu trúc chung của đề thi DipIFR

DipIFR exam được tổ chức 2 lần trong năm: tháng 6 và tháng 12 với hình thức thi tự luận trực tiếp trên giấy. Địa điểm do ACCA chỉ định.

Thời gian thi tự luận sẽ kéo dài 3 giờ 15 phút. Đặc biệt, không giới hạn số lần thi. Bài thi yêu cầu sự kết hợp giữa các phép tính toán và các câu trả lời tự luận. Bài thi sẽ có 4 câu hỏi lớn, mỗi câu 25 điểm. Tổng bài thi là 100 điểm. Thí sinh đạt 50% số điểm để vượt qua bài thi DipIFR. Các câu hỏi có nội dung như sau:

Câu 1: Lập Báo cáo tài chính hợp nhất (trừ báo cáo lưu chuyển tiền tệ)
Câu 2,3,4: Xác định và giải thích các vấn đề liên quan tới báo cáo tài chính (dựa trên IFRS)

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ĐỀ THI DIPIFR THÁNG 12/2018 VÀ LỜI GIẢI CHI TIẾT (TIẾNG ANH)

Câu 1:

Alpha currently has investments in two other entities, Beta (Note 1) and Gamma (Note 2). The draft statements of financial position of Alpha and Beta at 30 September 2018 were as follows:

	Alpha	Beta
	$’000	$’000
Assets
Non-current assets
Property, plant and equipment (Notes 1 and 5)	775,000	380,000
Investments (Notes 1-3)	410,000	Nil
	—-	—-
	1,185,000	380,000
	—-	—-
Current assets:
Inventories (Note 4)	150,000	95,000
Trade receivables (Note 4)	100,000	80,000
Cash and cash equivalents	18,000	15,000
	—-	—-
	268,000	190,000
	—-	—-
Total assets	1,453,000	570,000
	—-	—-
Equity and liabilities
Equity
Share capital ($1 shares)	520,000	160,000
Retained earnings	693,000	200,000
	—-	—-
Total equity	1,213,000	360,000
	—-	—-
Non-current liabilities
Long-term borrowings	100,000	80,000
Deferred tax	60,000	45,000
	—-	—-
Total non-current liabilities	160,000	125,000
	—-	—-
Current liabilities
Trade and other payables	60,000	55,000
Short-term borrowings	20,000	30,000
	—-	—-
Total current liabilities	80,000	85,000
	—-	—-
Total liabilities	240,000	210,000
	—-	—-
Total equity and liabilities	1,453,000	570,000

Note 1 – Alpha’s investment in Beta

On 1 October 2011, Alpha acquired 120 million shares in Beta and gained control of Beta on that date. The acquisition was financed by a cash payment by Alpha of $144 million to the former shareholders of Beta on 1 October 2011 and a further cash payment of $145·2 million to the former shareholders of Beta paid on 1 October 2013. The annual rate to use in any discounting calculations is 10% and the relevant discount factor is 0·826. Alpha correctly accounted for the payments made to the former shareholders of Beta in its own financial statements. The cost of investment figure in the financial statements of Alpha was rounded to the nearest $ million.

Alpha incurred due diligence costs of $1 million relating to the acquisition of Beta and included these costs in the carrying amount of its investment in Beta. On 1 October 2011, the individual financial statements of Beta showed retained earnings of $80 million.

The directors of Alpha carried out a fair value exercise to measure the identifiable assets and liabilities of Beta on 1 October 2011. The following matters emerged:

– Property which had a carrying amount of $120 million (land component $40 million) had an estimated fair value of $160 million (land component $60 million). The buildings component of the property had an estimated remaining useful life of 40 years at 1 October 2011.

– Plant and equipment having a carrying amount of $120 million had an estimated fair value of $130 million. The estimated remaining useful life of this plant at 1 October 2011 was two years.

– The fair value adjustments have not been reflected in the individual financial statements of Beta. In the consolidated financial statements, the fair value adjustments will be regarded as temporary differences for the purposes of computing deferred tax. The rate of deferred tax to apply to temporary differences is 20%.

On 1 October 2011, the directors of Alpha initially measured the non-controlling interest in Beta at its fair value on that date. On 1 October 2011, the fair value of an equity share in Beta (which can be used to measure the fair value of the non-controlling interest) was $1·70. No impairments of the goodwill on acquisition of Beta have been evident up to and including 30 September 2018.

Note 2 – Alpha’s investment in Gamma

On 1 October 2015, Alpha acquired 36 million shares in Gamma by means of a cash payment of $145 million. Gamma’s issued share capital at that date was 120 million shares. On 1 October 2015 and 30 September 2018, the individual financial statements of Gamma showed retained earnings of $45 million and $65 million respectively. Since 1 October 2015, no other investor has owned more than 2% of the shares of Gamma.

Note 3 – Alpha’s investment in Delta

On 1 October 2012, Alpha issued 80 million of its own shares in exchange for an 80% shareholding in Delta. Delta has an issued share capital of 100 million shares. The fair value of an equity share in Alpha on that date was $1·40.

The fair values of the net assets of Delta at 1 October 2012 were the same as their carrying amounts.

On 1 October 2012, the directors of Alpha initially measured the non-controlling interest in Delta at its fair value on that date. On 1 October 2012, the fair value of an equity share in Delta (which can be used to measure the fair value of the non-controlling interest) was $1·10.

The individual financial statements of Delta showed net assets at the following amounts:

– $110 million on 1 October 2012.

– $170 million on 30 September 2017.

In the year ended 30 September 2018, the individual financial statements of Delta showed a profit of $24 million. On 31 March 2018, Delta paid a dividend of $9 million.

On 30 June 2018, Alpha disposed of its shareholding in Delta for cash proceeds of $180 million. The individual financial statements of Alpha recognised the correct profit on disposal of its shareholding in Delta. No impairment of the goodwill on acquisition of Delta had been necessary between 1 October 2012 and 30 June 2018.

Note 4 – Intra-group trading

Alpha supplies a component to Beta at a mark-up of 25% on its production cost. The trade receivables of Alpha at 30 September 2018 include $10 million receivable from Beta in respect of sales of the component. Beta paid Alpha $10 million to clear the outstanding balance on 29 September 2018. Alpha received and recorded this amount on 3 October 2018.

On 30 September 2018, the inventories of Beta included $15 million in respect of components purchased from Alpha. All such inventory is measured at original cost to Beta.

Note 5 – Property lease

On 1 October 2017, Alpha began to lease a property under a 10-year lease. The annual rate of interest implicit in the lease was 5%. The lease rentals payable by Alpha were $10 million, payable annually in arrears. The lease does not transfer ownership of the property to Alpha at the end of the lease term. The lease contains no option for Alpha to purchase the property at the end of the lease term. On 1 October 2017, Alpha incurred direct costs of $4 million in arranging this lease. The only accounting entries made by Alpha in respect of this lease were to charge $14 million to the statement of profit or loss. Using a discount rate of 5%, the cumulative present value of $1 payable annually in arrears for ten years is $7·72.

Yêu cầu:

(a) Compute the profit or loss on disposal of the investment in Delta which would be shown in the consolidated statement of profit or loss of Alpha for the year ended 30 September 2018.

(b) Prepare the consolidated statement of financial position of Alpha at 30 September 2018. You need only consider the deferred tax implications of any adjustments you make where the question specifically refers to deferred tax.

Note: You should show all workings to the nearest $’000.

Hướng dẫn giải:

(a) Computation of profit or loss on the disposal of Delta

	$’000
Disposal proceeds	180,000
Net assets at date of disposal (W1)	(179,000)
Unimpaired goodwill at date of disposal (W2)	(24,000)
Non-controlling interest at date of disposal (W3)	35,800
So profit on disposal equals	12,800

Working 1 – Net assets at date of disposal

	$’000
Net assets at 30 September 2017 per individual financial statements of Delta	170,000
Profit for the year of Delta to date of disposal (9/12 x 24,000)	18,000
Dividend paid prior to date of disposal	(9,000)
Net assets at date of disposal in consolidated financial statements	179,000

Working 2 – Goodwill at date of disposal (note the same as at acquisition as there is no impairment

	$’000
Cost of investment (80,000 x $1·40)	112,000
Non-controlling interest at date of acquisition (20,000 x $1·10)	22,000
Fair value of net assets at date of acquisition	(110,000)
So goodwill on consolidation equals	24,000

Working 3 – Non-controlling interest at date of disposal

	$’000
Non-controlling interest at date of acquisition (W2)	22,000
Share of change in net assets to date of disposal (20% x 69,000 (W4))	13,800
So non-controlling interest at date of disposal equals	35,800

Working 4 – Change in net assets from date of acquisition to date of disposal

	$’000
Net assets at date of disposal (W1)	179,000
Net assets at date of acquisition	(110,000)
Change in net assets	69,000

Tutorial note: An alternative method of computing the gain or loss on disposal of Delta in the consolidated financial statements would be to compute the gain or loss shown by Alpha in its individual financial statements and adjust this to reflect the different post-acquisition treatment in the consolidated financial statements. This is shown in the working below:

	$’000
Proceeds of disposal	180,000
Cost of investment	(112,000)
Profit made (and already recorded) by Alpha in its own financial statements	68,000
Group share (80%) of post-acquisition change in net assets (69,000 – W4) recorded in the consolidated financial statements but not in the financial statements of Alpha	(55,200)
Group profit	12,800

WORKINGS – DO NOT DOUBLE COUNT MARKS. ALL NUMBERS IN $’000 UNLESS OTHER STATED

Working 1 – Net assets table – Beta

	1 October 2011	30 September 2018
	$’000	$’000
Share capital	160,000	160,000
Retained earnings:
Per accounts of Beta	80,000	200,000
Fair value adjustments
Property (160,000 – 120,000)	40,000	40,000
Extra depreciation due to buildings uplift ((100,000 – 80,000) x 7/40)		(3,500)
Plant and equipment (130,000 – 120,000)	10,000	Nil
Deferred tax on fair value adjustments
Date of acquisition (20% x 50,000)	(10,000)
Year end (20% x 36,500)		(7,300)
Net assets for the consolidation	280,000	389,200

The post-acquisition increase in net assets is 109,200 (389,200 – 280,000)

Working 2 – Goodwill on consolidation of Beta

	$’000
Cost of investment:
Cash payment made on 1 October 2011	144,000
Deferred cash payment made on 1 October 2013 (145,200/ (1.10)2)	120,000
Non-controlling interest at date of acquisition (40,000 x $1.70)	68,000
Net assets at date of acquisition (W1)	(280,000)
So closing goodwill equals	52,000

Working 3 – Non-controlling interest in Beta

	$’000
At date of acquisition (W2)	68,000
Share of post-acquisition increase in net assets – 25% x 109,200 (W1)	27,300
	95,300

Working 4 – Retained earnings

	$’000
Alpha	693,000
Adjustment for Beta’s acquisition costs:	(1,000)
Adjustment re: lease (W10)	2,020
Beta (75% x 109,200 (W1))	81,900
Unrealized profit on sales to Beta (15,000 x 25/125)	(3,000)
Gamma (W6)	6,000
	778,920

Working 5 – Investment in Gamma

	$’000
Cost	145,000
Share of post-acquisition profits (W6)	6,000
	151,000

Working 6 – Share of post-acquisition reserves of Gamma – equity method

	$’000
Retained earnings on 30 September 2018	65,000
Retained earnings on 1 October 2015	(45,000)
Post-acquisition retained earnings	20,000
Group share (30%)	6,000

Working 7 – Right of use asset

	$’000
Present value of minimum lease payments (10,000 x 7.72)	77,200
Initial direct costs of arranging lease	4,000
	81,200
Depreciation (1/10)	(8,120)
So closing right of use asset is	73,080

Working 8 – Lease liability and associated finance cost

	$’000
Initial liability (W7)	77,200
Finance cost (5%)	3,860
Lease rental payable in arrears	(10,000)
So closing lease liability equals	71,060

Working 9 – Lease liability split

	$’000
Overall liability at year-end (W8)	71,060
Finance cost for next year (5% x 71,060)	(3,553)
Lease rental payable in arrears	10,000
So closing current lease liability equals	6,447

Working 10 – Adjustments to consolidated retained earnings re: lease

	$’000
Required charges to profit and loss:
Finance cost (W8)	(3,860)
Depreciation (W7)	(8,120)
Reversal of amount incorrectly charged	14,000
So net adjustment equals	2,020

Working 11 – Long-term borrowings

	$’000
Alpha + Beta	180,000
Non-current lease liability ((71,060 – 6,447) – (W9))	64,613
	244,613

Working 12 – Deferred tax

	$’000
Alpha + Beta	105,000
On fair value adjustments in Beta (W1)	7,300
	112,300

Working 13 – Short-term borrowings

	$’000
Alpha + Beta	50,000
Current lease liability (W9)	6,447
	56,447

(b) Consolidated statement of financial position of Alpha at 30 September 2018

Assets	$’000
Non-current assets:
Property, plant and equipment (775,000 + 380,000) + (40,000 – 3,500) (W1) + 73,080 (W7) + 3 (W7)	1,264,580
Goodwill (W2)	52,000
Investment in Gamma (W5)	151,000
	—-
	1,467,580
	—-
Current assets:
Inventories (150,000 + 95,000 – (15,000 x 25/125 – unrealised profit))	242,000
Trade receivables (100,000 + 80,000 – 10,000 (intra-group))	170,000
Cash and cash equivalents (18,000 + 15,000 + 10,000 (cash in transit))	43,000
	—-
	455,000
	—-
Total assets	1,922,580
	—-
Equity and liabilities
Equity attributable to equity holders of the parent
Share capital	520,000
Retained earnings (W4)	778,920
	—-
	1,298,920
Non-controlling interest (W3)	95,300
	—-
Total equity	1,394,220
	—-
Non-current liabilities:
Long-term borrowings (W11)	244,613
Deferred tax (W12)	112,300
	—
	356,913
Current liabilities:
Trade and other payables (60,000 + 55,000)	115,000
Short-term borrowings (W13)	56,447
	—-
Total current liabilities	171,447
	—-
Total liabilities	528,360
	—-
Total equity and liabilities	1,922,580

Câu 2:

Epsilon is an entity which prepares financial statements to 30 September each year.

(a) Purchase of machine

On 1 April 2018, Epsilon accepted delivery of a large and complex machine from an overseas supplier. The agreed purchase price for the machine was 20 million francs – the functional currency of the supplier. Under the terms of the agreement with the supplier 12·6 million francs was payable on 31 July 2018, with the balance of 7·4 million francs being payable on 30 November 2018. The payment due on 31 July 2018 was made in accordance with the terms of the agreement. Epsilon does not use hedge accounting.

On 1 April 2018, Epsilon incurred direct costs of $250,000 in installing the machine at its premises. Although the machine was ready for use from 1 April 2018, Epsilon did not bring the machine into use until 30 April 2018. During April 2018 Epsilon incurred costs of $200,000 in training relevant staff to use the machine.

The directors of Epsilon estimate that the machine is capable of being usefully employed in the business until 31 March 2023, and that it will have no residual value at that date.

(b) Decommissioning

On 31 March 2023, Epsilon will be legally required to decommission the machine using the original supplier. The directors of Epsilon estimate that the cost of safely decommissioning the machine on 31 March 2023 will be 3 million francs.

Note: A relevant annual rate to be used in any discounting calculations is 8% and the appropriate discount factor is 0·681.

(c) Impairment review

During the final few months of the accounting period ending on 30 September 2018, Epsilon experienced difficult trading conditions. These difficulties did not affect the ability of Epsilon to operate as a going concern. In an impairment review of the machine at 30 September 2018, the directors of Epsilon estimated that the machine’s recoverable amount was $2·5 million.

Yêu cầu: Explain and show with appropriate calculations how the above events would be reported in the financial statements of Epsilon for the year ended 30 September 2018. Marks will be awarded for BOTH figures AND explanations.

Relevant exchange rates (francs to $1) are as follows:

– 1 April 2018 – 10 francs to $1.

– 30 April 2018 – 9·5 francs to $1.

– 31 July 2018 – 9 francs to $1.

– 30 September 2018 – 8 francs to $1.

– Average rate for the period from 1 April 2018 to 30 September 2018 – 9·2 francs to $1.

Hướng dẫn giải:

(a) Purchase of machine

The cost of purchasing the machine from the foreign supplier (20 million francs) will initially be recognised in the financial statements using the rate of exchange at the date of delivery (10 francs to $1). Therefore $2 million (20 million/10) will be included in Epsilon’s property, plant and equipment (PPE).

PPE is a non-monetary item, so even though the exchange rate (francs to the $) fluctuates during the accounting period, this will cause no change to the $2 million carrying amount.

The liability to pay the supplier will initially be recognised at $2 million (the $ cost of the machine).

The part payment of the liability on 31 July 2018 will be recorded using the rate of exchange on that date. Therefore $1,400,000 (12,600,000/9) will be credited to cash and debited to the liability.

The closing liability is a monetary item, so on 30 September 2018 it needs to be re-measured using the rate of exchange in force at that date.

The amount of the closing liability in $ is $925,000 (7·4 million /8). This will be shown as a current liability.

Due to the strengthening of the franc against the $, there will be an exchange loss on the re-measurement of the liability which must be recognised in the statement of profit or loss. The amount of the exchange loss is $325,000 ($925,000 – ($2,000,000 – $1,400,000)).

The $250,000 cost of installing the machine is a directly attributable cost of getting the machine ready for use and this amount will be added to the cost of PPE.

The costs of $200,000 incurred in training staff to use the machine are revenue items and cannot be included in the cost of PPE. These must be charged in the statement of profit or loss as an expense.

(b) Decommissioning

Epsilon has a legal obligation to dispose of the machine safely at the end of its useful life. This obligation is reliably measurable and so it must be recognised as a provision on 1 April 2018.

The provision is recognised at the present value of the estimated future expenditure of 3 million francs (3 million x 0·681 = 2,043,000 francs).

The provision is added to the cost of the asset using the rate of exchange on 1 April 2018 (10 francs to $1). Therefore $204,300 (2,043,000/10) is added to the cost of PPE.

As the date for payment of the disposal costs draws closer the provision increases. This ‘unwinding of the discount’ is shown as a finance cost in the statement of profit or loss.

The finance cost in francs is 81,720 (2,043,000 x 8% x 6/12). This will be translated into $ using the average rate for the period from 1 April 2018 to 30 September 2018 (9·2 francs to $1). Therefore the charge to the statement of profit or loss for the finance cost will be $8,883 (81,720/9·2).

The closing provision for decommissioning is a monetary item, so on 30 September 2018 it needs to be re-measured using the rate of exchange in force at that date.

The provision in francs is 2,124,720 (2,043,000 + 81,720). The $ equivalent of this is $265,590 (2,124,720/8).

The provision will be shown as a non-current liability in the statement of financial position at 30 September 2018.

Due to the strengthening of the franc against the $, there will be an exchange loss on the remeasurement of the provision which must be recognised in the statement of profit or loss. The amount of the exchange loss is $52,407 ($265,590 – ($204,300 + $8,883)).

(c) Impairment review

The total initial cost of the machine will be $2,454,300 ($2 million + $250,000 + $204,300).

The machine will be depreciated from 1 April 2018 over its five-year useful life, so the depreciation charge for the year ended 30 September 2018 will be $245,430 ($2,454,300 x 1/5 x 6/12).

The closing carrying amount of the machine in PPE will be $2,208,870 ($2,454,300 – $245,430). This will be shown as a non-current asset in the statement of financial position at 30 September 2018.

The difficult trading conditions experienced by Epsilon in the final few months of the financial year is an indicator that the machine could have suffered impairment. Therefore a review is required. However, since the recoverable amount ($2·5 million) of the machine is higher than its carrying amount, no impairment loss needs to be recorded.

Xem thêm: Đề thi IFRS – Chuẩn mực báo cáo tài chính quốc tế các năm

Câu 3:

IAS 33 – Earnings per Share – sets out requirements for the calculation and presentation of earnings per share in financial statements of listed entities. The requirements include the disclosure of basic earnings per share and, where an entity has potential ordinary shares in issue, the additional disclosure of diluted earnings per share in certain circumstances.

Kappa is a listed entity with a number of subsidiaries. Extracts from the consolidated statement of profit or loss and other comprehensive income of Kappa for the year ended 30 September 2018 appear below:

	Attributable to Kappa	Non-controlling interest	Total
	$’000	$’000	$’000
Profit for the year	39,000	3,000	42,000
Other comprehensive income	5,000	Nil	5,000
Total comprehensive income	44,000	3,000	47,000

The long-term finance of Kappa comprises:

(i) 200 million ordinary shares in issue at the start of the year. On 1 January 2018, Kappa issued 50 million new ordinary shares at full market value.

(ii) 80 million irredeemable preference shares. These shares were in issue for the whole of the year ended 30 September 2018. The dividend on these preference shares is discretionary.

(iii) $180 million 6% convertible loan stock issued on 1 October 2016 and repayable on 30 September 2021 at par. Interest is payable annually in arrears. As an alternative to repayment at par, the lenders on maturity can elect to exchange their loan stock for 100 million ordinary shares in Kappa. On 1 October 2016, the prevailing market interest rate for five-year loan stock which had no right of conversion was 8%. Using an annual discount rate of 8%, the present value of $1 payable in five years is $0·68 and the cumulative present value of $1 payable at the end of years one to five is $3·99.

In the year ended 30 September 2018, Kappa declared an ordinary dividend of 10 cents per share and a dividend of 5 cents per share on the irredeemable preference shares.

The annual rate of income tax applicable to Kappa and its subsidiaries is 20%.

All transactions have been correctly accounted for in the financial statements of Kappa for the year ended 30 September 2018.

Yêu cầu:

(a) Explain the meaning of the term ‘potential ordinary shares’ and provide TWO examples of potential ordinary shares OTHER THAN convertible loans.

(b) Explain how the diluted earnings per share is calculated and when it needs to be disclosed.

(c) Compute the finance cost of the convertible loan stock which will be shown in the consolidated statement of profit or loss of Kappa for the year ended 30 September 2018 and the related loan liability which will be shown in the consolidated statement of financial position of Kappa at 30 September 2018.

(d) Compute the basic and diluted earnings per share amounts for Kappa for the year ended 30 September 2018 which will be presented in its consolidated financial statements for that year.

Hướng dẫn giải:

(a) Potential ordinary shares are financial instruments or other contracts which may entitle the holder to ordinary shares (credit given if point is made but worded differently).

Examples of potential ordinary shares include convertible preference shares, share options and contingently issuable shares (credit given if other valid examples are provided).

(b) The diluted earnings per share is calculated by computing what the earnings per share figure would have been if the potential ordinary shares had been converted into ordinary shares on the first day of the accounting period, or from their date of acquisition by the holder, if the potential ordinary shares were acquired during the current accounting period (credit given if point is made but worded differently).

The diluted earnings per share figure only needs to be disclosed if it is lower than the basic earnings per share figure.

(c) The carrying amount of the convertible loan at 1 October 2016 (in $’000) will be 10,800 (180,000 x 6%) x 3·99 + 180,000 x 0·68 = 165,492.

The finance cost for the year ended 30 September 2017 will be 165,492 x 8% = 13,239.

So the loan liability at 30 September 2017 will be 167,931 (165,492 + 13,239 – 10,800).

The finance cost for the year ended 30 September 2018 will be 13,434 (167,931 x 8%).

So the closing loan liability at 30 September 2018 will be 170,565 (167,931 + 13,434 – 10,800).

(d)

	$’000
Basic earnings per share – Total profits:
Profit attributable to Kappa	39,000
Dividend on irredeemable preference shares (80,000 x 0·05)	(4,000)
	—-
Profit attributable to the ordinary shareholders of Kappa	35,000
	—-
Weighted average number of ordinary shares in issue:
1 October 2017 to 31 December 2017: 200,000 x 3/12 + 250,000 x 9/12	237,000
	—-
So basic earnings per share equals	14.7 cents
Diluted earnings per share on total profits
Earnings per basic EPS (credit for ‘own figure’ here)	35,000
Add: post-tax interest saving on ‘conversion’ of convertible loans (W1)	10,747
	—-
Profit per diluted EPS	45,747
	—-
Weighted average number per basic EPS (credit for ‘own figure’ here)	237,500
Add: shares issuable on ‘conversion’ of convertible loans	100,000
	—-
Weighted average number per diluted EPS	337,500
	—-
So diluted earnings per share on total profits equals (disclose as smaller than basic EPS)	13.6 cents

Working 1 – Post-tax interest saving on ‘conversion’ of convertible loans

	$’000
Pre-tax interest saving (as per part (c))	13,434
Income tax relief lost (20% – own figure credit given here)	(2,687)
So post-tax interest saving equals	10,747

Câu 4:

You are the financial controller of Omega, a listed entity which prepares consolidated financial statements in accordance with International Financial Reporting Standards. The financial statements for the year ended 30 September 2018 are due to be published shortly. A trainee accountant who is assigned to your department is reviewing the financial statements as part of a training exercise. She has prepared a list of queries arising out of this review.

Query One

When I look at the statement of financial position, one of the categories of non-current assets is ‘investment properties’ and another category is ‘property, plant and equipment’ – in which all other properties are included. Surely we invest in all our properties, so why have two categories for them in the statement of financial position? How do we decide what goes where?

A note to the financial statements states that investment properties are measured at their fair values and not depreciated. Don’t all non-current assets have to be depreciated over their estimated useful lives? Another note states that property included in property, plant and equipment is measured at cost less accumulated depreciation rather than at fair value. Shouldn’t all properties be measured in the financial statements on a consistent basis?

Finally, I can’t immediately see from the financial statements where the gains or losses relating to the measurement of investment properties are included. The profit statement seems to include two main components – profit or loss and other comprehensive income. Where would the gains or losses go? Presumably the treatment of gains and losses is the same for any non-current assets which are measured at fair value?

Query Two

When I looked at the note detailing the intangible assets we include in our consolidated statement of financial position, I noticed that several brand names associated with subsidiaries we acquired recently were included in this figure. Therefore I also expected to see a figure for the Omega brand name included within intangible assets. There doesn’t appear to be any amount for the Omega brand name included within intangible assets and I don’t understand why. The Omega brand name has been developed within Omega for a number of years and is well regarded by our customers. Surely it’s a mistake not to include it as well?

Query Three

One of the notes to the financial statements refers to a legal claim made against Omega by Customer X. This relates to losses incurred by Customer X due to Omega supplying this customer with a faulty product. Further investigation revealed that the fault was due to one of Omega’s suppliers, Supplier Y, supplying Omega with a faulty component. This component was used to manufacture the product supplied to Customer X. Therefore Omega made a legal claim against Supplier Y in respect of that faulty component. The note states that both legal claims will probably succeed. I don’t understand why Omega’s financial statements include a liability in respect of the expected settlement of Customer X’s legal claim but do not include an asset in respect of the expected settlement of Omega’s legal claim against Supplier Y. This seems inconsistent.

Yêu cầu: Provide answers to the queries raised by the trainee. You should justify your answers with reference to relevant IFRS Standards.

Hướng dẫn giải:

(a) Query One

Properties which are held for investment purposes are dealt with in IAS 40 – Investment Properties.

IAS 40 defines investment properties as property held for rental or capital appreciation or both rather than for use in the ordinary course of business (give credit if wording different but correct in principle).

Under IAS 40, there are two permitted methods of accounting for investment properties.

One of these methods is the fair value method. Under this method investment properties are not depreciated, but are measured annually at fair value, with gains or losses on re-measurement being recognised in the statement of profit or loss.

We could have chosen to measure our investment properties under the cost model (the model we have used to measure our other properties (see below)).

Where a property is used in the ordinary course of business it is included in property, plant and equipment and subject to a different IFRS Standards – IAS 16 – Property, Plant and Equipment.

IAS 16 allows properties to be measured under two alternative models.

Under one of these models – the cost model – properties are measured at original cost less accumulated depreciation. This is the model we have chosen to use in our financial statements.

Under the revaluation model of IAS 16, gains on revaluation are generally recognised in other comprehensive income but losses (falling below carrying amount) are generally recognised in the statement of profit or loss. The only exception to recognising a surplus in other comprehensive income is when it reverses a previous deficit which was recognised in the statement of profit or loss. In such cases, the reversal is recognised in the statement of profit or loss also.

(b) Query two

The accounting treatment of intangible assets is regulated by IAS 38 – Intangible Assets.

Under IAS 38, the accounting treatment of intangible assets depends on how they arose.

The intangible assets of acquired subsidiaries were acquired as a result of a business combination and the initial recognition requirements are contained in IFRS 3 – Business Combinations.

When a new subsidiary is acquired, the purchase consideration needs to be allocated to the identifiable assets and liabilities of the acquired subsidiary.

A brand name (or any other intangible asset for that matter) is regarded as identifiable if it is separable (can be sold without selling the whole business) or arises from contractual or other legal rights (such as legally protecting its use).

Identifiable intangible assets associated with an acquired subsidiary can be recognised separately in the consolidated financial statements provided their fair value can be reliably estimated.

The Omega brand is an internally developed brand.

IAS 38 does not allow the recognition of internally developed brands because of the inherent difficulties involved in identifying and measuring them.

This explains why the Omega brand is treated differently compared to the brands of acquired subsidiaries.

The accounting treatment of both items is governed by IAS 37 – Provisions, Contingent Liabilities and Contingent Assets.

The legal claim against Omega is a provision as it is a liability of uncertain timing or amount. IAS 37 requires provisions to be recognised where there is a probable outflow of economic benefits which can be reliably measured.

The legal claim by Omega against Supplier Y is a contingent asset as it is a possible asset arising from past events.

IAS 37 states that contingent assets should not be recognised in the financial statements but should be disclosed where there is a probable inflow of economic benefits.

This explains the distinction between the treatment of the two legal claims.

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