案例分析题4、Almost all assets and liabilities have some level of uncertainty relating to them

案例分析题Background Banana is the parent of a listed group of companies which have a year end of 30 June 20X7. Banana has made a number of acquisitions and disposals of investments during the current financial year and the directors require advice as to the correct accounting treatment of these acquisitions and disposals. The acquisition of Grape On 1 January 20X7, Banana acquired an 80% equity interest in Grape. The following is a summary of Grapes equity at the acquisition date. The purchase consideration comprised 10 million of Bananas shares which had a nominal value of $1 each and a market price of $680 each. Additionally, cash of $18 million was due to be paid on 1 January 20X9 if the net profit after tax of Grape grew by 5% in each of the two years following acquisition. The present value of the total contingent consideration at 1 January 20X7 was $16 million. It was felt that there was a 25% chance of the profit target being met. At acquisition, the only adjustment required to the identifiable net assets of Grape was for land which had a fair value $5 million higher than its carrying amount. This is not included within the $70 million equity of Grape at 1 January 20X7. Goodwill for the consolidated financial statements has been incorrectly calculated as follows: The financial director did not take into account the contingent cash since it was not probable that it would be paid. Additionally, he measured the non-controlling interest using the proportional method of net assets despite the group having a published policy to measure non-controlling interest at fair value. The share price of Grape at acquisition was $425 and should be used to value the non-controlling interest. The acquisition and subsequent disposal of Strawberry Banana had purchased a 40% equity interest in Strawberry for $18 million a number of years ago when the fair value of the identifiable net assets was $44 million. Since acquisition, Banana had the right to appoint one of the five directors on the board of Strawberry. The investment has always been equity accounted for in the consolidated financial statements of Banana. Banana disposed of 75% of its 40% investment on 1 October 20X6 for $19 million when the fair values of the identifiable net assets of Strawberry were $50 million. At that date, Banana lost its right to appoint one director to the board. The fair value of the remaining 10% equity interest was $45 million at disposal but only $4 million at 30 June 20X7. Banana has recorded a loss in reserves of $14 million calculated as the difference between the price paid of $18 million and the fair value of $4 million at the reporting date. Banana has stated that they have no intention to sell their remaining shares in Strawberry and wish to classify the remaining 10% interest as fair value through other comprehensive income in accordance with IFRS 9 Financial Instruments. The acquisition of Melon On 30 June 20X7, Banana acquired all of the shares of Melon, an entity which operates in the biotechnology industry. Melon was only recently formed and its only asset consists of a licence to carry out research activities. Melon has no employees as research activities were outsourced to other companies. The activities are still at a very early stage and it is not clear that any definitive product would result from the activities. A management company provides personnel for Melon to supply supervisory activities and administrative functions. Banana believes that Melon does not constitutea business in accordance with IFRS 3 Business Combinations since it does not have employees nor carries out any of its own processes. Banana intends to employ its own staff to operate Melon rather than to continue to use the services of the management company. The directors of Banana therefore believe that Melon should be treated as an asset acquisition but are uncertain as to whether the International Accounting Standards Boards exposure draft Definition of a Business and Accounting for Previously Held Interests ED 2016/1 would revise this conclusion. The acquisition of bonds On 1 July 20X5, Banana acquired $10 million 5% bonds at par with interest being due at 30 June each year. The bonds are repayable at a substantial premium so that the effective rate of interest was 7%. Banana intended to hold the bonds to collect the contractual cash flows arising from the bonds and measured them at amortised cost. On 1 July 20X6, Banana sold the bonds to a third party for $8 million. The fair value of the bonds was $105 million at that date. Banana has the right to repurchase the bonds on 1 July 20X8 for $88 million and it is likely that this option will be exercised. The third party is obliged to return the coupon interest to Banana and to pay additional cash to Banana should bond values rise. Banana will also compensate the third party for any devaluation of the bonds. Required:

案例分析题Background Farham manufactures white goods such as washing machines, tumble dryers and dishwashers

案例分析题The introduction of a new accounting standard can have significant impact on an entity by changing the way in which financial statements show particular transactions or events

案例分析题4、(a) The existing Conceptual Framework has several notable omissions

案例分析题Section A THIS ONE question is compulsory and MUST be attempted 1、(a) The following draft statements of financial position relate to Bread and its subsidiary Butter, both public listed entities, as at 31 December 2017. The following information is relevant to the preparation of the group financial statements: 1. Bread acquired an 80% equity interest in Butter on 1 January 2014 for a consideration of $1,000 million. At this date the retained earnings and other components of equity were $344 million and $46 million respectively. The fair value of the identifiable net assets of Butter at 1 January 2014 was $1,070 million. The difference between the carrying amount and the fair value of the net assets at 1 January 2014 was due to unrecognised intangibles with a remaining useful life of five years. It is group policy to measure non-controlling interests using the proportional method of the fair value of the net assets. Goodwill has been reviewed annually for impairment and, as at 1 January 2016, none had occurred. The recoverable amount of the net assets of Butter at 31 December 2017 was estimated as $1,328 million. 2. Bread acquired all of the equity shares in Jam on 1 January 2015 for a consideration of $1,250 million. The carrying amount and fair value of the identifiable net assets at acquisition were $1,230 million. At 31 December 2017, Bread was in the process of selling its entire shareholding in Jam and so it was decided that Jam should be treated as a disposal group held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations at that date. The carrying amounts of Jams net assets before classification as held for sale at 31 December 2017 in the individual financial statements are as follows: The group has a policy of revaluing its property, plant and equipment in accordance with IAS 16 Property, Plant and Equipment. There have been no revaluations or any other gains or losses included within Jams other components of equity since the date of acquisition as the carrying amount was deemed to be a close enough approximation to fair value. However, at 31 December 2017, property with a carrying amount of $330 million was deemed to have a fair value of $340 million. No adjustment has yet been made for this fair value. The total fair value less costs to sell of the disposal group at 31 December was estimated to be $1,220 million. There have been no previous impairments to the goodwill of Jam. 3. Bread operates a defined benefit scheme which at 31 December 2016 was in deficit by $120 million. Details for the current year are as follows: The rate of interest applicable to good quality corporate bonds was 5% at 31 December 2016. The cash contributions for the scheme have been correctly accounted for in the financial statements for the year ended 31 December 2017. This is the only adjustment which has been made in respect of the scheme. 4. On 1 January 2016, Bread gave 10,000 of its employees 200 share options each conditional that they worked for Bread for a further three years. During 2016, 980 employees left and a figure was correctly recorded in the financial statements of $39 million for the year ended 31 December 2016. During 2017, a further 950 employees left and it was estimated that 920 would leave in the following year. Details of the fair value of each option are given below. Bread has not made any accounting entries in respect of the share option scheme for the year ended 31 December 2017. 5. Bread owns a 25% share in a manufacturing facility which had a total construction cost of $200 million and was completed and ready for use on 31 March 2017. The facility is expected to have a useful life of 20 years. All economic decisions concerning the facility require the unanimous consent of Bread and two other investors who own the remaining 75% of the facility. The investment in the manufacturing facility was correctly deemed to be a joint operation and trading from the facility started from 30 June 2017. Revenues earned from the facility for the period ended 31 December 2017 were $57 million. Production costs for goods sold and other operating costs were $36 million. Bread has not made any accounting entries for the year ended 31 December 2017 in relation to the facility, except for $50 million construction costs included within property, plant and equipment. It has been agreed that profits and losses should be split evenly across the three investors. Required: Prepare the consolidated statement of financial position of the Bread group for the year ended 31 December 2017. (35 marks) (b) The directors of Bread have been reviewing their classification of Jam as held for sale within IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Jam operates in the electricity generation industry which is highly regulated. It is thought that it is highly probable that a purchaser would be found for Jam shortly after 31 December 2017 but that any sale would be subject to regulatory approval which could extend the period beyond 31 December 2018. Actions required to comply with regulatory approval cannot be initiated until a purchase commitment is obtained from the prospective acquirer. In the meantime, Jam will continue to supply electricity to its existing customers. Bread intends to sell all of its shares to the new purchaser who would obtain all of Jams rights and obligations. The directors of Jam do not intend to sell off any significant assets on an individualbasis as this could impact on their supply of electricity to their customers and ultimately affect the sales price of the shares. Required: Discuss why the directors of Bread were correct to classify the proposed sale of Jam as a disposal group held for sale within the context of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. (6 marks) (c) The Bread group has always measured the non-controlling interest using the proportional share of the fair value of the net assets method. Bread, Butter and Jam are all listed and therefore have readily ascertainable market value for their shares. The directors of Bread are contemplating changing their policy retrospectively to measuring the non-controlling interest at fair value as a reliable and fair calculation of the non-controlling interest is obtainable. They are therefore proposing that they analyse the impact of the alternative valuations of the non-controlling interest on a subsidiary by subsidiary basis for current group members and any proposed future acquisitions. They believe that it is the directors responsibility to maximise the wealth of the entitys shareholders and intend to choose a valuation which will maximise profitability and equity. The directors of Bread have a history of changing accounting policies on a regular basis should they believe that it would have a positive impact on the financial statements. Required: Discuss whether the proposed change in accounting policy is permitted by International Accounting Standards and how it could impact on future group profitability ratios. Consider any ethical issues which may arise from the scenario. (9 marks)

案例分析题The International Accounting Standards Board (IASB) is undertaking a broad-based initiative to explore how disclosures in IFRS financial reporting can be improved. The Disclosure Initiative is made up of a number of implementation and research projects. The IASB has decided that the project should include a discussion on whether the definition of materiality should be changed and whether IAS 1 Presentation of Financial Statements should include additional guidance which clarifies the key characteristics of materiality. Materiality is a matter which has been debated extensively in the context of many forms of reporting, including the International Integrated Reporting Framework. There are difficulties in applying the concept of materiality in practice when preparing the financial statements and it is thought that these difficulties contribute to a disclosure problem, namely, that there is both too much irrelevant information in financial statements and not enough relevant information. Further, the IASB has published for public comment an Exposure Draft of proposed amendments to IAS 7 Statement of Cash Flows. The proposal responds to requests from investors for improved disclosures about an entitys financing activities and its cash and cash equivalents balances. Required:

案例分析题Section A THIS ONE question is compulsory and MUST be attempted The following information relates to the financial statements of the Weston Group: Weston Group: Statement of financial position as at 31 January Weston Group: Statement of profit or loss and other comprehensive income for the year ended 31 January 2016 Notes: (i) On 31 July 2015, Weston disposed of their entire 80% equity holding in Northern for cash. The shares had been acquired on 31 July 2011 for a consideration of $132 million when the fair value of the net assets was $124 million. This included a fair value uplift of $16 million in relation to plant with a remaining useful life of eight years. Deferred tax at 25% on the fair value adjustment was also correctly provided for in the group accounts and is included within the fair value of net assets. The fair value of the non-controlling interest at acquisition was $28 million. Goodwill, calculated under the full fair value method, was tested annually for impairment. At 31 January 2015, goodwill relating to Northern had been impaired by 75%. A goodwill impairment charge has been included within administration expenses for the current year but does not relate to Northern. The carrying values in the individual accounts of Northern at disposal are listed below. The fair value adjustment and subsequent deferred tax were not incorporated into the individual accounts of Northern. (ii) The loss for the period from discontinued operations in the consolidated statement of profit or loss and other comprehensive income relates to Northern and can be analysed as follows: (iii) Weston purchased a 40% interest in an associate for cash on 1 February 2015. The associate paid a dividend of $10 million in the year ended 31 January 2016. (iv) The retirement benefit liability relates to Weston as other companies in the group operate defined contribution schemes. The latest actuarial valuation is as follows: The benefits paid in the period by the trustees of the scheme were $7 million. Weston operates in a country which only allows tax relief when contributions are paid into the scheme. The tax base was therefore zero at 31 January 2015 and 31 January 2016. The tax rate paid by Weston is 25%. The defined benefit expense is included within administrative expenses. (v) On 1 February 2015, Weston commenced development expenditure on product Q. Product Q is expected to be launched during 2017. $7 million amortisation on other intangible assets is included within cost of sales. (vi) There were no disposals of property, plant and equipment during the year except on the sale of Northern. Depreciation for the year was $20m and is included within the cost of sales. (vii) The financial asset at amortised cost is a $20 million two-year loan which Weston gave to an unconnected company on 1 February 2015. Twelve month expected credit losses were estimated at $1 million and have been charged to administrative expenses. The coupon and effective rate of interest were both 8%. Interest was received on 31 January 2016 and recorded correctly in the consolidated financial statements despite a significant deterioration in economic conditions within the industry of the unconnected company. As a result, the investment is to be downgraded with an expected 40% chance of default on the remaining cash flows. No entry has yet been made to downgrade the investment in the consolidated financial statements. (viii) Included within the trade and other payables at 31 January 2015 was contingent consideration of $10 million. A discount rate of 10% was used to measure the fair value of this obligation. This arose on the acquisition of Eastern, a subsidiary acquired several years ago. The consideration to be paid was contingent on the profits of Eastern. Eastern did not perform as well as expected during the year and Weston paid $7 million in full and final settlement of the obligation on 31 January 2016. (ix) Weston did not pay a dividend to its shareholders during the year ended 31 January 2016. Required:

案例分析题3、(a) Medsupply operates in the medical supply industry and has a financial year end of 31 May 2018

案例分析题(a) Fill is a coal mining company and sells its coal on the spot and futures markets

案例分析题Section B TWO questions ONLY to be attempted (a) Suntory, a private limited company, has two overseas subsidiaries, Maior and Minor. Suntory is based in a country which has a currency of the dollar. Maior is based in Japan where the currency is the yen. Minor is based in Portugal which has the currency of the euro. Suntory and Minor sell golf clothing and Maior sells golf equipment. Maior and Minor are financed by the provision of long-term loans at market interest rates in dollars from Suntory. Suntorys sales are mainly in its own jurisdiction, and are priced and collected in dollars. The legal requirements and the business environment in Suntorys jurisdiction determines the pricing of Suntorys products. Goods and services are sourced locally and paid in dollars but occasionally the entity trades in small amounts in other currencies. Maior conducts its business with significant autonomy from Suntory as it manufactures golf equipment which it sells mainly in Japan in yen. Local management determines prices based upon the local legal and business conditions. Most raw materials and labour are sourced from local suppliers with a small amount of specialised equipment sourced from China. Maior sells a small amount of golf clothing, which it purchases from Suntory and pays in dollars. Minor imports golf clothing manufactured by Suntory and pays Suntory in dollars. All other operating expenses are paid in euros. Suntory gives Minor a discount on the normal selling price of its products. Minor sells its products mainly in Portugal in euros. The local legal and business conditions and the cost of the product from Suntory dictate the pricing of products but all prices have to be agreed by Suntory. At the month end, an intra-group dividend is paid in cash to Suntory in euros which amounts to the net profit made by Minor for the month. The directors require advice on the determination of each of the functional currencies of Suntory, Maior and Minor. (9 marks) (b) On 1 December 2012, Suntory acquired a trademark, Golfo, for a line of golf clothing for $3 million. Initially, Suntory expected to continue marketing and receiving cash flows from the Golfo product-line indefinitely. However, because of the difficulty in determining its useful life, Suntory decided to amortise the trademark over a 10-year life, using the straight-line method. In December 2015, a competitor unexpectedly revealed a technological breakthrough which is expected to result in a product which, when launched, will significantly reduce the demand for the Golfo product-line. The demand for the Golfo product-line is expected to remain high until May 2018, when the competitor is expected to launch its new product. At 30 November 2016, the end of the financial year, Suntory assessed the recoverable amount of the trademark at $500,000 and intends to continue manufacturing Golfo products until 31 May 2018. The directors of Suntory require advice as to how to deal with the trademark in the financial statements for the year ended 30 November 2016. (7 marks) (c) At 30 November 2016, three people own the shares of Suntory. The finance director owns 60%, and the operations director owns 30%. The third owner is a passive investor who does not help manage the entity. All ordinary shares carry equal voting rights. The wife of the finance director is the sales director of Suntory. Their son is currently undertaking an internship with Suntory and receives a salary of $30,000 per annum, which is normal compensation. The finance director and sales director have set up an investment company, Baleel. They jointly own Baleel and their shares in Baleel will eventually be transferred to their son when he has finished the internship with Suntory. In addition, on 1 June 2016 Suntory obtained a bank loan of $500,000 at a fixed interest rate of 6% per annum. The loan is to be repaid on 30 November 2017. Repayment of the principal and interest is secured by a guarantee registered in favour of the bank against the private home of the finance director. The directors of Suntory require advice on the identification and disclosure of the companys related parties in preparing its separate financial statements for the year ending 30 November 2016. (7 marks) Required: Discuss the advice which should be given to Suntory in each of the above cases with reference to relevant International Financial Reporting Standards. Note: The mark allocation is shown against each of the three issues above. Professional marks will be awarded in question 2 for clarity and quality of presentation. (2 marks)

案例分析题3、Carsoon Co is a company which manufactures and retails motor vehicles

案例分析题Section B TWO questions ONLY to be attempted (a) Mehran, a public limited company, has just acquired a company, which comprises a farming and mining business. Mehran wishes advice on how to fair value some of the assets acquired. One such asset is a piece of land, which is currently used for farming. The fair value of the land if used for farming is $5 million. If the land is used for farming purposes, a tax credit currently arises annually, which is based upon the lower of 15% of the fair market value of land or $500,000 at the current tax rate. The current tax rate in the jurisdiction is 20%. Mehran has determined that market participants would consider that the land could have an alternative use for residential purposes. The fair value of the land for residential purposes before associated costs is thought to be $74 million. In order to transform the land from farming to residential use, there would be legal costs of $200,000, a viability analysis cost of $300,000 and costs of demolition of the farm buildings of $100,000. Additionally, permission for residential use has not been formally given by the legal authority and because of this, market participants have indicated that the fair value of the land, after the above costs, would be discounted by 20% because of the risk of not obtaining planning permission. In addition, Mehran has acquired the brand name associated with the produce from the farm. Mehran has decided to discontinue the brand on the assumption that it will gain increased revenues from its own brands. Mehran has determined that if it ceases to use the brand, then the indirect benefits will be $20 million. If it continues to use the brand, then the direct benefit will be $17 million. (8 marks) (b) Mehran wishes to fair value the inventory of the entity acquired. There are three different markets for the produce, which are mainly vegetables. The first is the local domestic market where Mehran can sell direct to retailers of the produce. The second domestic market is one where Mehran sells directly to manufacturers of canned vegetables. There are no restrictions on the sale of produce in either of the domestic markets other than the demand of the retailers and manufacturers. The final market is the export market but the government limits the amount of produce which can be exported. Mehran needs a licence from the government to export its produce. Farmers tend to sell all of the produce that they can in the export market and, when they do not have any further authorisation to export, they sell the remaining produce in the two domestic markets. It is difficult to obtain information on the volume of trade in the domestic market where the produce is sold locally direct to retailers but Mehran feels that the market is at least as large as the domestic market direct to manufacturers. The volumes of sales quoted below have been taken from trade journals. (9 marks) (c) Mehran owns a non-controlling equity interest in Erham, a private company, and wishes to fair value it as at its financial year end of 31 March 2016. Mehran acquired the ordinary share interest in Erham on 1 April 2014. During the current financial year, Erham has issued further equity capital through the issue of preferred shares to a venture capital fund. As a result of the preferred share issue, the venture capital fund now holds a controlling interest in Erham. The terms of the preferred shares, including the voting rights, are similar to those of the ordinary shares, except that the preferred shares have a cumulative fixed dividend entitlement for a period of four years and the preferred shares rank ahead of the ordinary shares upon the liquidation of Erham. The transaction price for the preferred shares was $15 per share. Mehran wishes to know the factors which should be taken into account in measuring the fair value of their holding in the ordinary shares of Erham at 31 March 2016 using a market-based approach. (6 marks) Required: Discuss the way in which Mehran should fair value the above assets with reference to the principles of IFRS 13 Fair Value Measurement. Note: The mark allocation is shown against each of the three issues above. Professional marks will be awarded in question 2 for clarity and quality of presentation. (2 marks)

案例分析题Section A THIS ONE question is compulsory and MUST be attempted 1、(a) The following draft statements of financial position relate to Diamond, Spade and Club, all public listed entities, as at 31 March 2017. The following information is relevant to the preparation of the group financial statements: 1. On 1 April 2016, Diamond acquired 70% of the equity interests of Spade paying cash of $1,140 million. At 1 April 2016, the retained earnings and other components of equity of Spade were $780 million and $64 million respectively. The fair value of the identifiable net assets of Spade at 1 April 2016 was $1,600 million. It is group policy to value non-controlling interests at fair value and, at the date of acquisition, this was $485 million. The excess in fair value of the identifiable net assets is due to non-depreciable land. 2. On 1 April 2015, Diamond acquired 40% of the equity interests of Club for cash consideration of $420 million. At this date the carrying amount and fair value of the identifiable net assets of Club was $1,032 million. Diamond treated Club as an associate and equity accounted for Club up to 31 March 2016. On 1 April 2016, Diamond took control of Club, acquiring a further 45% interest for cash of $500 million and added this amount to the carrying amount of its investment in Club. On 1 April 2016, the retained earnings and other components of equity of Club were $293 million and $59 million respectively and the fair value of the identifiable net assets was $1,062 million. The difference between the carrying amounts and the fair values was in relation to plant with a remaining useful life of five years. The share prices of Diamond and Club were $5 and $160 respectively on 1 April 2016. The fair value of the original 40% holding and the fair value of the non-controlling interest should both be estimated using the market value of the shares. 3. Diamond has owned a 25% equity interest in Heart for a number of years. Heart had profits for the year ended 31 March 2017 of $20 million which can be assumed to have accrued evenly. Heart does not have any other comprehensive income. On 30 September 2016, Diamond sold a 10% equity interest for cash of $42 million. Diamond was unsure of how to treat the disposal and so has deducted the proceeds from thecarrying amount of the investment at 1 April 2016 which was $110 million (calculated using the equity accounting method). The fair value of the remaining 15% shareholding was estimated to be $65 million at 30 September 2016 and $67 million at 31 March 2017. Diamond no longer exercises significant influence and has designated the remaining shareholding as fair value through other comprehensive income. 4. Goodwill has been reviewed for impairment and no impairment was deemed necessary. 5. On 1 April 2015, Diamond acquired $50 million of 6% listed bonds at their nominal value. Diamond may sell or hold bonds to maturity and so, based on this business model, has designated the bonds as fair value through other comprehensive income. The effective rate of interest on the bonds is also 6%. The bonds had a fair value of $42 million at 31 March 2016 and were correctly treated in the financial statements of that year. On 31 March 2017, Diamond received the coupon interest of $3 million, which was recorded within interest received, and then sold the bonds on the same day for $35 million. The disposal proceeds were substantially below the fair value of the bonds which was $38 million at 31 March 2017. A $7 million loss on disposal was charged against profits. Diamond has an option to repurchase the bonds at any time up to 31 December 2018 for $36 million. The fair value is expected to increase in the future and it is highly likely that Diamond will exercise this option. 6. Diamond operates a defined benefit pension scheme. On 31 March 2017, the company announced that it was to close down a business division and agreed to pay each of its 150 staff a cash payment of $50,000 to compensate them for loss of pension arising from wage inflation. It is estimated that the closure will reduce the present value of the pension obligation by $58 million. Diamond is unsure of how to deal with the settlement and curtailment and has not yet recorded anything within its financial statements. 7. On 1 April 2016, Diamond acquired a manufacturing unit under an eight-year finance lease. The lease rentals have been recorded correctly in the financial statements of Diamond. However, Diamond could not operate effectively from the unit until alterations to its structure costing $66 million were completed. The manufacturing unit was ready for use on 31 March 2017. The alteration costs of $66 million were charged to administration expenses. The lease requires Diamond to restore the unit to its original condition at the end of the lease term. Diamond estimates that this will cost a further $5 million. Market interest rates are currently 6%. Note: The following discount factors may be relevant: Required: Prepare the consolidated statement of financial position of the Diamond Group as at 31 March 2017 in accordance with International Financial Reporting Standards.(35 marks) (b) Diamond is looking at ways that it may improve its liquidity. One option is to sell some of its trade receivables to a debt factor. The directors are considering two possible alternative agreements as described below: 1. Diamond could sell $40 million receivables to a factor with the factor advancing 80% of the funds in full and final settlement. The factoring is non-recourse except that Diamond has guaranteed that it will pay the factor a further 9% of each receivable which is not recovered within six months. Diamond believes that its customers represent a low credit risk and so the probability of default is very low. The fair value of the guarantee is estimated to be $50,000. 2. Alternatively, the factor would advance 20% of the $40 million receivables sold. Further amounts will become payable to Diamond but are subject to an imputed interest charge so that Diamond receives progressively less of the remaining balance the longer it takes the factor to recover the funds. The factor has full recourse to Diamond for a six-month period after which Diamond has no further obligations and has no rights to receive any further payments from the factor. Required: If Diamond decides to go ahead with the debt factoring arrangements, explain the financial reporting principles involved and advise how each of the above arrangements would impact upon the financial statements of future years. (9 marks) (c) Diamond has debt covenants attached to some of the loan balances included within liabilities on its statement of financial position. The covenants create a legal obligation to repay the debt in full if Diamond fails to maintain a liquidity ratio and operating profit margin above a specified minimum. The directors are concerned about the negative impact which any potential debt factoring arrangements (as described in part (b) above) may have on these covenants. If they proceed, they are proposing to treat the factoring arrangements in accordance with their legal form so that it is consistent with the legal obligation created by the covenants. Any discount arising from the factoring arrangement would be disclosed separately on the face of the statement of profit or loss and other comprehensive income. The directors believe that this will achieve consistency, though they are aware that the proposed treatment may be contrary to accounting standards. Required: Discuss the ethical issues which arise from the proposal by Diamond. (6 marks)

案例分析题(a) Evolve is a real estate company, which is listed on the stock exchange and has a year end of 31 August

案例分析题Section A THIS ONE question is compulsory and MUST be attempted The following draft financial statements relate to Zippy, a public limited company. Zippy is a manufacturing company but also has a wide portfolio of investment properties. Zippy has investments in Ginny and Boo, both public limited companies. Draft statements of profit or loss and other comprehensive income for the year ended 30 June 2016 The following information is relevant to the preparation of the group statement of profit or loss and other comprehensive income: 1. On 1 July 2014, Zippy acquired 60% of the equity interests of Ginny, a public limited company. The purchase consideration comprised cash of $90 million and the fair value of the identifiable net assets acquired was $114 million at that date. Zippy uses the full goodwill method for all acquisitions and the fair value of the non-controlling interest (NCI) in Ginny was $50 million on 1 July 2014. Goodwill had been reviewed annually for impairment and no impairment was deemed necessary. 2. Zippy disposed of a 20% equity interest in Ginny on 31 March 2016 for a cash consideration of $44 million. The remaining 40% holding had a fair value of $62 million and Zippy exercised significant influence over Ginny following the disposal. Zippy accounts for investments in subsidiaries at cost and has included a gain in investment income of $14 million within its individual financial statements to reflect the disposal. The net assets of Ginny had a fair value of $118 million at 1 July 2015 and this was reflected in the carrying amounts of the net assets. All gains and losses of Ginny have accrued evenly throughout the year. The disposal is not classified as a separate major line of business or geographical operation. 3. Zippy acquired 80% of the equity interests of Boo, a public limited company, on 30 June 2014. The purchase consideration was cash of $60 million. The fair value of the NCI was calculated as $12 million at this date. Due to a tight reporting deadline, the fair value of the identifiable net assets at acquisition had not been finalised by the time the financial statements for the year ended 30 June 2014 were published. Goodwill of $28 million was calculated using the carrying amount of the net assets of Boo. The fair value of the identifiable net assets of Boo was finalised on 31 December 2014 as $54 million. The excess of the fair value of the identifiable net assets at acquisition is due to plant which had a remaining useful life of five years at the acquisition date. Due to the losses of Boo, an impairment review was undertaken at 30 June 2016. It was decided that goodwill had reduced in value by 10%. Goodwill impairments are charged to other expenses. 4. Zippy holds properties for investment purposes. At 1 July 2015, Zippy held a 10-floor office block at a fair value of $90 million with a remaining useful life of 15 years. The first floor was occupied by Zippys staff and thesecond floor was let to Boo free of charge. The other eight floors were all let to unconnected third parties at a normal commercial rent. It was estimated that the fair value of the office block was $96 million at 30 June 2016. Zippy has a policy of restating all land and buildings to fair value at each reporting date. The only accounting entries for the year ended 30 June 2016 in relation to this office block have been to correctly include the rental income in profit or loss. It can be assumed that each floor is of equal size and value. Depreciation is charged to administrative costs. 5. During April 2016, an explosion at a different office block caused substantial damage and it was estimated that the fair value fell from $20 million at 30 June 2015 to $14 million at 30 June 2016. Zippy has estimated that costs of $3 million would be required to repair the block but is unsure whether to carry out the repairs or whether to sell the block for a reduced price. The property has been left in the financial statements at a value of $20 million. A provision of $3 million for the repair costs was charged to other expenses. 6. The following information relates to Zippys defined benefit pension scheme: No entries have been entered in the financial statements except that the contributions into the scheme have been correctly added to the pension schemes assets. 7. On 1 January 2016, Zippy entered into a contract to sell 10,000 units of a new product, the Whizoo, to a customer for $1,000 per unit. It was agreed that if the customer ordered an additional 5,000 units, a volume discounted price of $950 per unit would apply. 6,000 units were manufactured and delivered in the four months to 30 April 2016. Minor defects were discovered in the first 6,000 units due to an error in the manufacturing process and it was agreed that a credit note of $40 per unit would be issued as compensation. Zippy and the customer agreed to net this amount off against subsequent payments for future orders. A further 7,000 units had been manufactured and delivered by 30 June 2016 without any defects. Zippy has included $6 million in revenue (6,000 x $1,000) for the first 6,000 units but has not recorded any additional revenue, as the directors are unsure of the correct accounting treatment. Required:

案例分析题Section B TWO questions ONLY to be attempted 2、(a) Spamgate is a financial institution which acts in the retail sector providing loans and mortgages to companies and individuals

案例分析题Background The following are extracts from the consolidated financial statements of the Moyes group. Group statement of profit or loss for the year ended 30 September 20X8: Extracts from the group statement of financial position: 30 September 20X8 30 September 20X7 $m $m Inventories 126 165 Trade receivables 56 149 Trade payables 215 197 The following information is also relevant to the year ended 30 September 20X8: Pension scheme Moyes operates a defined benefit scheme. A service cost component of $24 million has been included within operating expenses. The remeasurement component for the year was a gain of $3 million. Benefits paid out of the scheme were $31 million. Contributions into the scheme by Moyes were $15 million. Goodwill Goodwill was reviewed for impairments at the reporting date. Impairments arose of $10 million in the current year. Property, plant and equipment Property, plant and equipment (PPE) at 30 September 20X8 included cash additions of $134 million. Depreciation charged during the year was $99 million and an impairment loss of $43 million was recognised. Prior to the impairment, the group had a balance on the revaluation surplus of $50 million of which $20 million related to PPE impaired in the current year. Inventory Goods were purchased for Dinar 80 million cash when the exchange rate was $1:Dinar 5. Moyes had not managed to sell the goods at 30 September 20X8 and the net realisable value was estimated to be Dinar 60 million at 30 September 20X8. The exchange rate at this date was $1:Dinar 6. The inventory has been correctly valued at 30 September 20X8 with both the exchange difference and impairment correctly included within cost of sales. Changes to group structure During the year ended 30 September 20X8, Moyes acquired a 60% subsidiary, Davenport, and also sold all of its equity interests in Barham for cash. The consideration for Davenport consisted of a share for share exchange together with some cash payable in two years. 80% of the equity shares of Barham had been acquired several years ago but Moyes had decided to sell as the performance of Barham had been poor for a number of years. Consequently, Barham had a substantial overdraft at the disposal date. Barham was unable to pay any dividends during the financial year but Davenport did pay an interim dividend on 30 September 20X8. Discontinued operations The directors of Moyes wish advice as to whether the disposal of Barham should be treated as a discontinued operation and separately disclosed within the consolidated statement of profit or loss. There are several other subsidiaries which all produce similar products to Barham and operate in a similar geographical area. Additionally, Moyes holds a 52%equity interest in Watson. Watson has previously issued share options to other entities which are exercisable in the year ending 30 September 20X9. It is highly likely that these options would be exercised which would reduce Moyes interest to 35%. The directors of Moyes require advice as to whether this loss of control would require Watson to be classified as held for sale and reclassified as discontinued. Required:

案例分析题Section A THIS ONE question is compulsory and MUST be attempted 1、(a) Moorland has investments in Lyndhurst and Tybull and all three are public limited companies. Tybull is located overseas and uses the dinar as its functional and presentation currency. Draft statements of profit or loss and other comprehensive income for the year ended 30 June 2017 The following information is relevant to the preparation of the group statement of profit or loss and other comprehensive income: 1. Moorland had acquired 40% of the equity interests in Lyndhurst for a cost of $100 million on 1 July 2015. On 1 July 2016, Moorland acquired a further 20% of the equity interests for $64 million and obtained control. The net assets of Lyndhurst had a carrying amount of $230 million and $250 million on 1 July 2015 and 1 July 2016 respectively. No fair value adjustments were required to the net assets at either date. The fair value of the original 40% equity interest at 1 July 2016 is deemed to be $115 million. This amount is also the fair value of the non-controlling interest at 1 July 2016. The only entries in Moorlands financial statements in relation to this transaction have been to record the investment at cost including $2 million of legal fees which have been capitalised as part of the $64 million investment. Moorland has a policy of valuing the non-controlling interest at fair value for all subsidiaries. 2. Moorland acquired 100% of the equity interests in Tybull for a cost of dinar 990 million on 1 July 2016. The fair value of the net assets at acquisition were dinar 888 million. This differed from the carrying amount of the net assets at acquisition due to plant which had a fair value of dinar 48 million in excess of its carrying amount. This plant had a remaining useful life of two years at 1 July 2016. It is group policy to classify depreciation on plant as a cost of sale. Tybull has not paid any dividends since Moorland gained control and has not reported any revaluation gains since acquisition. 3. Goodwill was reviewed for impairment on 30 June 2017 and a charge of 25% should be applied to both Lyndhurst and Tybull. This is the first time that either investment has been impaired. Goodwill impairments should be included within other expenses. 4. During the year ended 30 June 2017 Tybull sold goods to Moorland for dinar 120 million. The mark-up on these goods was 60%. Moorland has 80% of these goods still within inventories as at 30 June 2017. Moorland and Tybull have recorded this transaction correctly within their financial statements but have not yet made any correcting adjustments required on consolidation. Tax effects in respect of this adjustment can be ignored. 5. The Moorland group has a presentation currency of the dollar ($). Exchange rates between the dollar and dinar are as follows: 6. The group has a policy of revaluing its property on an annual basis and Lyndhurst has correctly accounted for a revaluation surplus on its property in its financial statements. Moorland owns property with the following details: Moorland has not yet provided for the revaluation gains and associated deferred tax for the year ended 30 June 2017. Moorland has a tax rate of 30% which is not expected to change in the foreseeable future. Revaluation gains are assumed to arise at the end of the year. 7. The following information relates to Moorlands defined benefit pension scheme: The discount rate applicable to the pension scheme is 6%. No accounting entries for the pension have yet been included for the year ended 30 June 2017. There are no temporary differences arising in relation to the defined benefit scheme. Required: Prepare the consolidated statement of profit or loss and other comprehensive income for the Moorland Group for the year ended 30 June 2017 (35 marks) (b) Tybull is the only subsidiary which is overseas and Moorland has always disclosed Tybull as an operating segment within the consolidated financial statements. The directors of Moorland are considering how the company identifies its operating segments and the rationale for disclosing segmental information. In particular, they are interested in whether it is possible to reclassify their operating segments and whether this may impact on the usefulness of segmental reporting for the business. Required: Advise the directors as to how operating segments are identified and whether they can be reclassified. Include in your discussion whether Tybull should be treated as a separate segment and how it may impact on the usefulness of the information if its results were not separately disclosed in accordance with IFRS 8 Operating Segments. (8 marks) (c) Tybull sold goods to Moorland during the year at a 60% mark-up. Similar goods are usually sold to other parties at a mark-up of 20%. The directors of Moorland believe that no ethical issues arise as such transactions will be eliminated within the consolidated financial statements. On 31 October 2017, Moorland announced its intention to sell its shareholding in Tybull to the highest bidder. Required: Identify the accounting principles which should be considered when accounting for intra-group transactions in the consolidated financial statements and identify any ethical issues which may arise from the scenario. (7 marks)

案例分析题Background The following is an extract from the statement of financial position of Fiskerton, a public limited entity as at 30 September 20X8