Word/Question
Digital Developments
Materiality
Asset
Liability
Equity
Fair Value
Value in use
Reclassification
IFRS 15 steps - revenue model steps
Standard Warranty
Extended Warranty
Principal
Agent
Call Option
Forward Option
Put Option
Financing arrangement (loan)
Lease
How is a contract modification treated?
PPE
Borrowing costs
Depreciation charge
Intangible assets cost model
Cash generating units (CGU's)
Financial Instrument
Derivative characteristics
Compound instrument
When does rerecognition occur?
When can an entity reclassify a FA?
Can a FL be reclassified?
Why do companies enter into hedges?
Defined contribution plan
Defined benefit plan
Deferred tax
How is deferred tax recognised?
Temp Diff
Tax base
Deferred Tax Formula
Onerous Contract
Adjusting Event
Non-adjusting Event
What does IAS 41 relate to?
Principal market
What does IAS 41 not relate to?
Goodwill Formula
What should you add to NCA?
Functional Currency
Presentational Currency
Earnings per share (EPS)
Threats
Reporting Entity
How should preference shares be classified?
Captial Maintenance
When do you derecognise an asset?
In what form does IAS 7 allow dividends to be paid?
What are the three headings for the classification of cash flows ?
What are the two ways operating activites can be presented and explain what they mea
What is investing activities?
What is financing activities?
When using the indirect menthod of c/f what figures must be added back?
When using the indirect menthod of c/f what figures must be deducted?
Amoritisation
Indirect C/F method formula
Indirect c.f method
Discontinued operation
how does IAS 2 define NRV
what IFRS standard does not apply to IAS 2 ?
when is an impairment recognised ?
Consignment Inventories
Preference shares
How should the difference between sale and repurchase price be recorded?
When should a credit loss be recognised? IFRS 9
Operating Lease
What is a business combination ?
When is an acquisition treated as a business combination?
IFRS 3 - concentration test
An intangible asset may be recognised in the FS if …
How is an intangible asset purchased separtely recognised?
How is an intangible asset acquired part of a business combination recognised?
How is internally generated goodwill recognised?
What are the three rules for intangible assets regarding amortisation
Define indefinite useful life and are these asset amoritised?
Research costs
Development costs
When should you derecognise an intangible asset?
Related party disclosures
How can information be material ?
Recognition
Fulfilment value
Provision
Three indicators of a consignment inventories
When is revenue recognied for consignment inventories
Contingent Liability
Def/Answer
Cybersecurity
AI
Crypto ( intangible digital token)
threshold of quality of information
The present economic resource controlled by an entity as a result of past events
The present obligation to transfer an economic resource as a result of past events
Net Assets = Share capital + reserves
Price to sell an asset / transfer a liability between market participants in
a transaction at measurement date
PV of cash flows that an entity expects to recevie from the use of an asset
Recyclying of gains & losses which were recognised in OCI
1) Identify contract with customer
2) Identify separate performance obligation (PO)
3)Determine transaction price
4)Allocate transaction price to PO
5) Recognise revenue as each PO is satisfied
Complies with agreed specification, no option to purchase separately
Recognises a provision based on estimated repair costs under IAS 37
Treat as a separate PO (IFRS 15)
Supplies own goods and services
Receives a fee/commission for arranging provisions of goods and services
Seller has the right to repurchase the asset
Seller has an obligation to repurchase the asset
Seller has an obligation to repurchase the asset if the customer requests it.
exercise price ≥ original selling price
exercise price < original selling price
Treated as a separate contract if the scope of the contract increases due to an addition of the good
Tangible items held by an entity for use in the production and used during more than one period
States the captilisation of finance costs including interest is required for any 'qualifiying asset'
cost/value - residual value / remaining useful life
Cost - accumulated amoritisation & impairment costs
smallest identifiable group of assets for which independent cash inflows can be identified and mea
Contract that gives rise to both FA of one entity and the FL of another
no initial investment
derives value from an underlying item
shows characterisitics of both equity and financial instruments
When contractual rights to c/f to the FA expire/sold based on whether the entity has transferred su
if it changes it's business model for managing FA
No
means to manage risk
The contributions are fixed, but the final pension amount is not guaranteed.
Employer pays fixed amount once employee has retired - final pension guaranteed
Not 'real' tax - it's an accounting adjustment
On temporary differences
Differences between carrying amount of an asset/liability in SFP and in tax base
Value of asset / liability for tax purposes
CA of asset/liability X/(X)
Tax base (X)/X
Temp diff X/(X)
Contract which the unavoidable costs exceed economic benefits
Provide evidence of conditions that existed at the end of the reporting period.
They represent additional information that confirms or clarifies a situation already in place at the b
Requires changes to the financial statements
Indicate a condition that arose after the end of the reporting period. They represent new conditions
at the balance sheet date.
Do not typically require adjustments to the financial statements and must be disclosed in the finan
Entities that grow/rear biological assets e.g.cows & plants
Most advantageous and greatest volume
Bearer plants
FV of consideration
+ FV of NCI
- FV of NA
=Gross Goodwill
Investment in associates (IIA)
Currency of primary economic environment in which the entity operates FACT
Currency which FS are presented in CHOICE
Earnings / Weighted average no of shares * 100
Self-interest
Self-review
Familiarity
Advocacy
Intimidation
Entity required to prepare F/S does not have to be a legal entity but can comprise of only a portion
According to it's substance rather than legal form
Concept to ensure excessive dividends are not paid in times of rising prices
When asset lost control no longer a present obligation
operating and financing activites
operating , financing and investing OFI
Direct method ( shows actual c/f from operating activities)
Indirect method (reconciles profit before tax to cash generated operating profit)
those related to non-current assets including investments e.g. buying PPE, sale proceeds on dispoa
related to c/f arirising from the way the entity is financed. It is normally a mixture between borrowi
depreciation and losses on disposal of NCA
Non-cash income e.g. profits on disposals
The accounting practice of spreading the cost of an intangible asset over its useful life
profit before tax + all non -cash expenses charged deduct non- cash income , then adjust for any c
The indirect method adjusts profit or loss for the effects of transactions of a non-cash nature,
any deferrals or accruals from past or future operating cash receipts or payments and
any items of income or expense associated with investing or financing cash flows.
Component of an entity which either has been disposed of or is classified as held for sale, and
(i) represents a separate major line of business or geographical area of operations;
(ii) is a single co-ordinated plan to dispose of a separate major line or area of operations;
(iii) is a subsidiary acquired exclusively for resale.
The estimated selling price in the ordinary course of business less the costs of completion and cost
13
when the carrying amount exceeds the recoverable amount. Where the recoverable amount is the
1) FV less costs of disposal
2) Value in use
when seller delivers a product to another party for sale to end customers, but retains conteol of tha
Shares in a company which gives their holders an entitlement to a fixed dividend but which do not
interest expense and be added to the carrying amoount of the financial liability
it should always be recognised at their PV and should be updated at each reporting period
lease that does not transfer subsutailly all risks and rewards incidental to owenrship of an underlyi
is a transaction in which the acquirer obtains control over one or more businesses.
it is necessary to assess whether the activities of Eclip Co constituted a business in the first place.T
have been capable of being conducted and managed in a way for the purpose of providing a return
members of the entity.
The Concentration Test is part of assessing whether a transaction is a business combinatio
1) it is probable that the entity will receive probable future economic benefits from the asset
2) the cost of the asset is measured reliably
at cost - directly attributable costs
FV at the date of acquistion
Not recognised
Residual value is normally assumed to be 0
Amoritisation begins when the asset is avaliable for use
Methods based on expected revenue are normally inappropriate
There is no forseeable limit to the period over which the asset is expected to generate net cash infl
not amoritised but must be tested for impairment annualy
costs that are incurred to gain new scientific knowledge and understanding - ALWAYS expensed in
costs incurred in the application of research findings to plan/design for production of new / improve
prior to commerical production/use
only on disposal / when there is no future economic benefits are expired from its use/disposal
Transfer of a resources, services or obligations between a reporting entity and a related party rega
changed
If omitting, misstating or obscuring it could resaonably be expected to influence decisions
criteria must be met: meets the definition of an element and it is probable that anu future econom
from the entity and item has a cost or value that can be measured reliably
The PV of cash/economic resoruces that an entity expects to transfer to meet a liability
A liability of uncertain timing or amount.
product is controlled by seller until specified event occurs
seller can require the return of product / transfer to third party
dealer does not have unconditional obligation to pay for the product
when control passes to the dealer
potential obligation that may arise if a specific uncertain future event occurs,
ownership
t) and by the shareholders (equity)
uisition. Happens before applying acquisition method
Word/Question
Digital Developments
Materiality
Asset
Liability
Equity (NASR)
Fair Value
Value in use
Reclassification
IFRS 15 steps - revenue model steps
Standard Warranty IAS 37
Extended Warranty IFRS15
Principal
Agent
Call Option
Forward Option
Put Option
Financing arrangement (loan)
Lease
How is a contract modification treated?
PPE
Borrowing costs
Depreciation charge
Intangible assets cost model
Cash generating units (CGU's)
Financial Instrument
Derivative characteristics
Compound instrument
When does derecognition occur?
When can an entity reclassify a FA?
Can a FL be reclassified?
Why do companies enter into hedges?
Defined contribution plan
Defined benefit plan
Deferred tax
How is deferred tax recognised?
Temp Diff
Tax base
Deferred Tax Formula
Onerous Contract
Adjusting Event
Non-adjusting Event
What does IAS 41 relate to?
Principal market
What does IAS 41 not relate to?
Goodwill Formula
What should you add to NCA?
Functional Currency
Presentational Currency
Earnings per share (EPS)
Threats
Reporting Entity
How should preference shares be classified?
Captial Maintenance
When do you derecognise an asset?
In what form does IAS 7 allow dividends to be paid?
What are the three headings for the classification of cash flows ?
What are the two ways operating activites can be presented and explain what they mea
What is investing activities?
What is financing activities?
When using the indirect menthod of c/f what figures must be added back?
When using the indirect menthod of c/f what figures must be deducted?
Amoritisation
Indirect C/F method formula
Indirect c.f method
Discontinued operation
how does IAS 2 define NRV
what IFRS standard does not apply to IAS 2 ?
when is an impairment recognised ?
Consignment Inventories
Preference shares
How should the difference between sale and repurchase price be recorded?
When should a credit loss be recognised? IFRS 9
Operating Lease
What is a business combination ?
When is an acquisition treated as a business combination?
IFRS 3 - concentration test
An intangible asset may be recognised in the FS if …
How is an intangible asset purchased separtely recognised?
How is an intangible asset acquired part of a business combination recognised?
How is internally generated goodwill recognised?
What are the three rules for intangible assets regarding amortisation
Define indefinite useful life and are these asset amoritised?
Research costs
Development costs
When should you derecognise an intangible asset?
Related party disclosures
How can information be material ?
Recognition
Fulfilment value
Provision
Three indicators of a consignment inventories
When is revenue recognied for consignment inventories
Contingent Liability
Def/Answer
AI, cyrpto, cyber
theshold of qualitty of information
present economic resource controlled by an entity due to past events
tranfering an econimic resorucse due to past events
Share Cap = Reserves +
the price to sell an asset / transfer a liablity between market participants at the measument date
the amount to be recveid for the use of the good/service
recylycing of gains and losses - OCI
determine the conrtact
separate each PO
calculate transaction price
once PO is satified, recognise rev
do not have to pay
have to pay separttely and treated as a separate PO
provides own g&s
is a third pary and gets commission for providing an entity g&S
seller has the right to repruchase asset
seller has the obligation to repurchase asset
seller has the obligation to repurchase asset if the customers asks for it
exercise price >= original selling price
exercise price < original selling price
as a separate PO if the scope increases due to the additon of the g/s
tangible asset that is owned b
n what they mean.
ognised?
Objectivity
Professional competence and due care
Professional behaviour
Intregity
Confidentiality
do not allow bias/conflicts of interest / undue influence to overrirde professional judgment
(both pre and post qualification) accountants should follow relevant accounting standards and apply c
comply with relevant laws and regulations
be straightforward and honest
do not disclose confidential information without permission and do not use the information for persona
IAS 1 Presentation of financial statements
IAS 2 Inventories
IAS 7 Group statements of cash flows
IAS 8 Accounting polices, changes in accounting estimates and erros
IAS 9 Financial Instruments
IAS 10 Events after a reporting period
IAS 16 PPE
IAS 19 Employee Benefits
IAS 20 Government grants
IAS 21 Effects of changes in foreign currency
IAS 23 Borrowing costs
IAS 24 Related party disclosures
IAS 36 Impairment of assets
IAS 37 Provisions,Contingencies and events after a reporting period
IAS 38 Intangible assets
IAS 40 Investment property
IAS 41 Agriculture
IFRS 2 Share based payment
IFRS 3 Business Combinations
IFRS 5 NCA held for sale and discounted operations
IFRS 9 Financial instruments
IFRS 10 Consolidated financial statements
IFRS 12 Disclousre of interests in other entites
IFRS 13 FV measurement
IFRS 15 Revenue from contracts with customers
IFRS 16 Leases
IFRS 28 Investments in assosciates and joint ventures
es and erros
ng period
1. Identify the Ethical Issue(s)
What’s the ethical dilemma?
Recognize the key ethical issues in the scenario. This could include conflicts of interest, transparenc
Example: "The company is considering overstating revenues to meet profit targets."
2. Recognize the Relevant Ethical Framework/Principles
Which ethical principles or frameworks are relevant?
Reference the relevant ethical principles from the ACCA Code of Ethics and Conduct.
These principles include:
Integrity: Being straightforward and honest.
Objectivity: Not allowing bias, conflict of interest, or undue influence.
Professional competence and due care: Maintaining professional knowledge and skill.
Confidentiality: Not disclosing information without proper authority.
Professional behavior: Complying with relevant laws and regulations.
Example: "The action could be seen as a breach of the principle of Integrity, as it involves misrepres
3. Evaluate the Ethical Issue(s)
What are the consequences of the action?
Discuss the potential consequences of the ethical issue for various stakeholders (shareholders, emp
Consider short-term and long-term effects.
Example: "Overstating revenue might initially increase profits, but in the long term, it could lead to le
4. Discuss Possible Courses of Action
What are the alternatives?
Identify and discuss possible actions that could be taken to resolve the ethical dilemma. Ensure thes
Present alternatives and show how they would resolve the issue within the professional and ethical
Example: "An alternative course of action would be to report the revenue accurately, which maintains
5. Make a Recommendation
What should be done?
After evaluating the alternatives, recommend the best course of action, ensuring that it aligns with
Justify your recommendation by explaining how it adheres to ethical standards and the potential pos
Example: "I recommend that the company should refrain from overstating revenue, as adhering to eth
6. Conclusion
Summarize the key points:
Briefly summarize the ethical issue, key principles, recommended action, and rationale.
Example: "In conclusion, the ethical dilemma requires the company to choose between short-term ga
Example Structure for Ethical Question:
Introduction:
Identify the ethical issue (e.g., "The company is facing pressure to meet profit targets and is conside
Body:
Ethical framework: Mention relevant principles (e.g., Integrity, Objectivity).
Evaluation of consequences: Discuss the potential impact on stakeholders and the company.
Possible actions: Suggest alternatives (e.g., accurate reporting, seeking advice from a professional b
Recommendation:
Provide a clear recommendation (e.g., "I recommend the company refrain from overstating revenue
Conclusion:
Briefly restate the ethical dilemma and the recommended solution.
compliance."
