Reconciliation of Movements in Shareholders' Funds

dreamkatcha
dreamkatcha Registered Posts: 9 New contributor 🐸
in AAT Level 4 (Level 8 in Scotland)
Hi,

I'm working through the June 2005 DFS exam paper (lots of wacky curve balls in this one aren't there?) and was wondering, does anyone know what the opening shareholders' funds figure consists of?

I tried looking it up in the Kaplan textbook, but as usual the relevant keywords are nowhere to be seen in the index making it impossible to navigate as a quick reference.

Comments

  • Richard
    Richard Registered Posts: 373 Dedicated contributor 🦉
    dreamkatcha wrote: »
    Hi,

    I'm working through the June 2005 DFS exam paper (lots of wacky curve balls in this one aren't there?) and was wondering, does anyone know what the opening shareholders' funds figure consists of?

    I tried looking it up in the Kaplan textbook, but as usual the relevant keywords are nowhere to be seen in the index making it impossible to navigate as a quick reference.

    The company issued 8,000,000 new shares with nominal value of 25p, therefore, we can calculate that the ordinary share capital has increased by 2,000,000 (£8m x 25p), and so has the share premium account.

    So the opening balance on the ordinary share capital will be £8m (£10m - £2m), and the share premium account will be £6m (£8m - £2m). When these are added to the P&L account brought forward of £17,349, it gives you the total of £31,349.


    Just a word of warning, be careful when using the past DFS papers as some of the standards have now changed.
  • dreamkatcha
    dreamkatcha Registered Posts: 9 New contributor 🐸
    Thanks for the detailed explanation. That's a big help. :)
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
    Hi,

    I wouldn't advise looking at any papers that examine UK GAAP as DFS/FNST is examined under IFRS. Whilst the two GAAP's are fairly similar, there are some very notable differences between the two so you are advised to work past papers/questions which examine IFRS.

    Kind regards,
    Steve
  • dreamkatcha
    dreamkatcha Registered Posts: 9 New contributor 🐸
    I had no idea the papers were based on different standards. Thanks for the tip. :)
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
    dreamkatcha wrote: »
    I had no idea the papers were based on different standards. Thanks for the tip. :)

    Hi,

    Yes two very different standards, more recently in terms of their terminology but less so in their comparative differences. AAT DFS/FNST papers will not examine UK GAAP (FRS/SSAP). Instead they will examine IFRS/IAS so make sure you practise questions using IFRS/IAS.

    Regards
    Steve

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