DFS Revision Game
Comments
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What is IAS 40?0
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Investment property0
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If that's right, question is what is the accounting treatment for increase/decrease in value of investment property ?0
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Hmm nutshells (wish I were a squirrel!), Defines investment property as assets held long term for capital appreciation or for rental income or empty for future rental,or unknown use (I think?). valued at cost or revaluaton model.0
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Hmm nutshells (wish I were a squirrel!), Defines investment property as assets held long term for capital appreciation or for rental income or empty for future rental,or unknown use (I think?). valued at cost or revaluaton model.
Lovely :-)If that's right, question is what is the accounting treatment for increase/decrease in value of investment property ?
In the statement of comprehensive income?
I'm just guessing now..... I've not done an example with this in yet!0 -
Yep, unlike PPE, IAS16, wot puts it in the revaluation reserve unless it's been devalued before when it goes to SoCI to the amount of devaluation remainder in reval reserve (you may want to verify that !).0
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also called 'acid test'
current assets (less inventories) / current liabilities
ideal is 1:1. Shows entity's ability to meet it's short term liabilities with it's short term assets i.e it's liquidity... excludes inventories as they are least liquid0 -
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I'll pick a hazy area of mine.. which standard deals with intangible assets and how/when are they tested for impairment (if at all?) and which internally generated intangible assets cannot be recognised?0
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I'll pick a hazy area of mine.. which standard deals with intangible assets and how/when are they tested for impairment (if at all?) and which internally generated intangible assets cannot be recognised?
IAS 38
Research is not allowable
Goodwill is covered in IFRS 3 so is not included in IRS 38
Internally generated goodwill is not allowable
Brands & customer lists are not allowable
My tutor used Cadburys as an example. They tried to capitalise Dairy Milk as they say basically they're nothing without it. They weren't allowed to.
Intangible assets are amortised over their useful life (i think)
And I don't know a thing about impairment - please feel free to elaborate.
Q What is included in Profit from Investing Activities in the Statement of Cash Flow?0 -
I like the cadbury example v useful
I seem to remember internally generated goodwill isn't allowable either as can't be measured reliably.
intangibles with indefinite life arn't amortised. instead impairment reviews where impairment is likely and also indefinite life mut be reviewed each period. if change to definite IAS 8 applies changes in accounting estimate.
goodwill and intangibles with indefinite useful must be reviewed minimum of annually per IAS36.
youv'e said what's included in profit from investing activities so I'm confused (easily done!) but anyway purchase of non current assets, proceeds of non current assets - not much?0 -
I like the cadbury example v useful
I seem to remember internally generated goodwill isn't allowable either as can't be measured reliably.
intangibles with indefinite life arn't amortised. instead impairment reviews where impairment is likely and also indefinite life mut be reviewed each period. if change to definite IAS 8 applies changes in accounting estimate.
goodwill and intangibles with indefinite useful must be reviewed minimum of annually per IAS36.
youv'e said what's included in profit from investing activities so I'm confused (easily done!) but anyway purchase of non current assets, proceeds of non current assets - not much?
Have i? I remember asking about financing activities... oops. Ah well, you can never ask the same question too many times, at least it'll sink in!!
Q I can't think of one :-(0 -
I meant to say 'proceeds from disposal of non-current assets'. Are those the only two things?0
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They're the only two things i've ever come across.
We need more people on this thread, our brains are losing the will to live I think!
Go on Dwarfy, it's your turn to ask a question....0 -
what do you take out of the consolidated income statements when dealing with intra company transactions?
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maybe we are just too boring - how can we liven things up?0 -
They're the only two things i've ever come across.
We need more people on this thread, our brains are losing the will to live I think!
Go on Dwarfy, it's your turn to ask a question....
i think you 2 are doing fab, i wish i was confident enough to answer let alone ask a question
Ok i will ask one (dont shoot me if it is crap)
how often should goodwill be reviewed for impairment0 -
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what do you take out of the consolidated income statements when dealing with intra company transactions?
ps
maybe we are just too boring - how can we liven things up?i think you 2 are doing fab, i wish i was confident enough to answer let alone ask a question
Ok i will ask one (dont shoot me if it is crap)
how often should goodwill be reviewed for impairment
Goodwill should be tested annually or more frequently if there is reason to believe it has been impaired.
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I was thinking of unrealised profit too.
it's your turn !0 -
Taskey is it at least annaully per IAS36 but if likely it's impaired then review needed?0
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i think you 2 are doing fab, i wish i was confident enough to answer let alone ask a question
Ok i will ask one (dont shoot me if it is crap)
how often should goodwill be reviewed for impairment
At the date of the SoFP, annually?
Again, just a guesstimate. Please let me know the correct answer!!
It's having the confidence not to be afraid to be wrong. There's loads and loads of people on this forum who are so helpful and can guide you in the right direction.what do you take out of the consolidated income statements when dealing with intra company transactions?
ps
maybe we are just too boring - how can we liven things up?
I'd agree with the boring thing. I love 'Lost' and instead of giving it my undivided attention last night, I was on here refreshing the page again and again!!Richard100 wrote: »Intra group sales, interest and dividends paid!!
This is the one usually shown as a bullet point right?
X sold £100 worth of goods to it's subsidiary Y. So you'd deduct it from X's debtors and Y's creditors?
Q Why do we use the debtor days and creditor days ratio's and what comments can be made on them if high or low?0 -
yes it is annually (or so my book says)
debtor and creditor day ratios show the rate at which monies are received from customers or paid to suppliers. if a business paid all of its suppliers immediately but failed to collect from its customers, it could find itself in difficulty
show the adjustment for deferred tax0 -
Debtor days ratio - how many days is it taking for the debtors to pay
High amount of days - credit control not working affectively
Low amount of days - discount applicable to paying early
Creditor days ratio - how many days are we taking to pay our suppliers
Low amount of days - maybe not taking full advantage of the credit terms.
Q: What is the return on capital employed ratio0 -
show the adjustment for deferred tax
DR Income Tax Expense in the income statement
CR Deferred Tax in the statement of financial positionsunshine0127 wrote: »Q: What is the return on capital employed ratio
Profit after Tax/ Capital Employed
I guessed at profit after tax, it may very well be operating profit but profit after tax seemed the more sensible option!!!!
Q What comments would be made if the ROCE is high?0 -
sunshine0127 wrote: »Debtor days ratio - how many days is it taking for the debtors to pay
High amount of days - credit control not working affectively
Low amount of days - discount applicable to paying early
Creditor days ratio - how many days are we taking to pay our suppliers
Low amount of days - maybe not taking full advantage of the credit terms.
Q: What is the return on capital employed ratio
Can I just add something to this?
With comparing creditor days and debtor days, a company should always try and collect their debts before paying their creditors, so for most companies I would also look if the debtor days are shorter than their creditor days and make a comment on that as well.DR Income Tax Expense in the income statement
CR Deferred Tax in the statement of financial position
Profit after Tax/ Capital Employed
I guessed at profit after tax, it may very well be operating profit but profit after tax seemed the more sensible option!!!!
Q What comments would be made if the ROCE is high?
I learned this as operating profit, but just cheated and checked my notes if I remembered wrong or not, but my notes have one time mentioned net profit and one time profit from operations (before finance costs), so now I am not sure.
As for the comments. a high ROCE means a high return on your capital, which means that the shareholders are happy, because their investment is most likely giving them more money per share. However as with everything, it is worth comparing it with the previous years and strongly dependant on the type of company. A manufacturing company will always have a lower return as they need all the machines and production lines to produce their products than for example a bookkeeper who only needs a few small assets to perform his work.
I hope I'm right in that and not going mental after a full day of work.
Q: What does the return on equity ratio show?0 -
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Return to shareholders?
I think ROCE uses operating profit - do we all agree?
Also it could be distorted by timing of large purchase/s of non-current assets.
I'm off to do some ' normal ' stuff now!0 -
Return to shareholders?
Basically ROCE is showing is the return on the investment, if you look at this from a shareholders perspective, they would want to know how much return they get on their investment, compared to other possible investments.
The higher the return (and possibly a low risk) the better. Hence my comment on return to shareholders.Also it could be distorted by timing of large purchase/s of non-current assets.
Thanks for adding that! I didn't think of that yet... (silly me...)0
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