[FR/F7: Tài liệu ôn thi] Part B: Accounting for transactions in financial statements - Phần 2

Part B sẽ ôn lại 13 dạng bài tập quan trọng môn Financial Reporting (F7) với chủ đề Accounting for transactions in financial statements phần thứ hai.

I. Tổng quan

Chủ đề	Dạng bài	Câu hỏi tương ứng
		Trắc nghiệm	Tự luận
7. Leasing	1. Measurement and Recognition	Câu 1 - 4
	2. Accounting for lease	Câu 5,6
	3. Sale and lease back	Câu 7
8. Provision and events after the reporting period	1. Provision	Câu 1,2	Câu 3
	2. Adjusting event and Non-adjusting event	Câu 4,5
9. Inventories and biological assets	1. Feature of biological assets according to IAS 41	Câu 1,2
	2. Inventory	Câu 3
10. Accounting for taxation	1. Accounting for taxation	Câu 1 - 4
11. Reporting financial performance	1. Accounting Policies, Changes in accounting estimates, and Errors	Câu 1
	2. Non-current assets held for sale and discontinued operations	Câu 2,3
	3. IAS 21 Foreign currency transactions	Câu 4,5
12. Earning per share	1. Basic EPS	Câu 3	Câu 1,2
	2. Diluted EPS	Câu 4,5
Reference: BPP ACCA F7 - Financial Reporting (FR) StudyText

II. Dạng bài tập chi tiết

1. Topic 7: Leasing

Ref: Tóm tắt kiến thức Topic 7: Leasing

Mức Độ: Quan trọng

1.1. DẠNG 1: Measurement and Recognition

Câu 1: Right of use

Learning outcome: Nắm được cách ghi nhận quyền sử dụng tài sản

Question: 

Which of the following would NOT be included within the initial cost of a right-of-use asset?

A.  Installation cost of the asset
B.  Estimated cost of dismantling the asset at the end of the lease period
C.  Payments made to the lessor before the commencement of the lease
D.  Total lease rentals payable under the lease agreement

Guidance (Tips/ Steps/ Cách tư duy)

At the commencement of the lease, the lessee should recognise a lease liability and a right-of-use asset. The lease liability is initially measured at the present value of the lease payments that have not yet been paid 

The right-of-use asset is initially recognised at cost, which comprises:

• The amount of the initial measurement of the lease liability
• Any lease payments made at or before the commencement date
• Any initial direct costs
• The estimated costs of removing or dismantling the underlying asset in accordance with the terms of the lease. 

Answer: D. Total lease rentals payable under the lease agreement

The value recognised in respect of the lease payments will be the present value of future lease payments rather than the total value. 

Câu 2: Right of use

Learning outcome: Nắm được kiến thức ghi nhận right of use assets

Question: 

IFRS 16 Leases permits certain assets to be exempt from the recognition treatment for right-of-use assets. Which of the following assets leased to an entity would be permitted to be exempt?

A.  A used motor vehicle with an original cost of $15,000 and a current fair value of $700, leased for 24 months
B.  A new motor vehicle with a cost of $15,000, leased for 36 months
C.  A new motor vehicle with a cost of $15,000, leased for 36 months, to be rented to customers on a daily rental basis
D.  A new motor vehicle with a cost of $15,000, leased for 12 months

Guidance (Tips/ Steps/ Cách tư duy)

Assets permitted to be exempted from recognition are low-value assets and those with a lease term of 12 months or less. 

The use of the asset is irrelevant, and, although IFRS 16 Leases does not define low-value, it is the cost when new that is considered rather than the current fair value. 

Answer: D. A new motor vehicle with a cost of $15,000, leased for 12 months

Câu 3: Lease liability

Learning outcome: Nắm được cách đo lường lease liability

Question: 

On 1 January 20X3 Rabbit acquires a new machine with an estimated useful life of 6 years under the following agreement: An initial payment of $13,760 will be payable immediately 5 further annual payments of $20,000 will be due, commencing 1 January 20X3

The interest rate implicit in the lease is 8% The present value of the lease payments, excluding the initial payment, is $86,240 What will be recorded in Rabbit’s financial statements at 31 December 20X4 in respect of the lease liability?

	Finance cost	Non-current liability	Current liability
A.	4,123	35,662	20,000
B.	5,299	51,539	20,000
C.	5,312	51,712	20,000
D.	5,851	43,709	15,281

Guidance (Tips/ Steps/ Cách tư duy)

Step 1: Calculate finance cost = The interest = Initial lease payment/Opening lease Balance – Annual paid) * implicit rate interest

Step 2: Calculate lease liability for each year

Lease liability = Initial lease payment/Opening lease Balance – Annual paid + Finance cost

Step 3: Calculate non-current lease 

Non-current lease = Closing lease Balance – Annual payment

Step 4: Calculate current lease liability

Current lease liability = lease liability – Non-current lease liability

Answer: A

Year	Balance b/f lease payment (1)	Payment (2)	Interest (3)=[(1)-(2)]*8%	Balance c/f lease payment (4) = (1)- (2) + (3)
20X3	86,240	(20,000)	5,299	71,539
20X4	71,539	(20,000)	4,123	55,662
20X5	55,662	(20,000)	2,853	38,515

Lease liability 31/12/20X3 = $86,240 - $20,000 + ($86,240 – $20,000)*8% = $71,539

Lease liability 31/12/20X4 = $71,539 - $20,000 + ($71,539 - $20,000)*8% = $55,662

Financial cost at 31 December 20X4 = 4,123

Non-current liability = 55,662 - $20,000 = $35,662 

Current liability = $55,662 - $35,662 = $20,000

Câu 4: Depreciation

Learning outcome: Nắm được lý thuyết về khấu hao tài sản thuê ngoài

Question: 

On 1 April 20X7 Pigeon entered into a five-year lease agreement for a machine with an estimated life of 7 years. Which of the following conditions would require the machine to be depreciated over 7 years?

A.  Pigeon has the option to extend the lease for two years at a market-rate rental.
B.  Pigeon has the option to purchase the asset at market value at the end of the lease.
C.  Ownership of the asset passes to Pigeon at the end of the lease period.
D.  Pigeon’s policy for purchased assets is to depreciate over 7 years.

Guidance (Tips/ Steps/ Cách tư duy)

The asset is depreciated over the shorter of the asset’s useful life and the lease term, unless ownership of the asset transfers to the lessee at the end of the lease, in which case depreciation should be charged over the asset’s useful life 

Answer: C. Ownership of the asset passes to Pigeon at the end of the lease period.

The transfer of ownership at the end of the lease indicates that Pigeon will have use of the asset for its entire life, and therefore 7 years is the appropriate depreciation period. 

1.2. DẠNG 2: Accounting for lease

Câu 5: Rental in arrears

Learning outcome: 

Question: 

On 1 January 20X4 Badger entered into a lease agreement to lease an item of machinery for 4 years with rentals of $210,000 payable annually in arrears. The asset has a useful life of 5 years and at the end of the lease term, legal ownership will pass to Badger. The present value of the lease payments at the inception of the lease was $635,000 and the interest rate implicit in the lease is 12.2%. For the year ended 31 December, 20X4 Badger accounted for this lease by recording the payment of $210,000 as an operating expense. This treatment was discovered during 20X5 after the financial statements for 20X4 had been finalized. In the statement of changes in equity for the year ended 31 December 20X5 what adjustment will be necessary to retained earnings brought forward?

A.  $5,530 credit
B.  $132,530 credit
C.  $210,000 debit
D.  $204,470 debit

Guidance (Tips/ Steps/ Cách tư duy)

Step 1: Identify adjustment event 

At the end of the lease term, legal ownership will pass to Badger 🡪 Badger need to calculate depreciation of PPE for 5 years.

Step 2: Identify entries must adjust and recognize entries correctly  

Step 3: Adjust all of adjustment on retained earnings account

Answer: 

Reverse incorrect treatment of rental: 

Dr Liability $210,000, Cr Retained Earnings $210,000 

Charge asset depreciation ($635,000/5): 

Dr Retained earnings $127,000, Cr PPE $127,000 

Charge finance cost ($635,000 × 12.2%): 

Dr Retained Earnings $77,470, Cr Liability $77,470 

🡪Net adjustment of $5,530 to be credited to opening retained earnings 

Câu 6: Rental in advance

Learning outcome: 

Question: 

On 1 October 20X6 Fino entered into an agreement to lease twenty telephones for its team of sales staff. The telephones are to be leased for a period of 24 months at a cost of $240 per telephone per annum, payable annually in advance. The present value of the lease payments on 1 October 20X6 is $9,164. 

On 1 April 20X7, Fino entered into an agreement to lease an item of the plant from the manufacturer. The lease required four annual payments in advance of $100,000 each commencing on 1 April 20X7. The plant would have a useful life of four years and would be scrapped at the end of this period. The present value of the total lease payments is $350,000. Fino has a cost of capital of 10% 

1. How much would be charged to Fino’s statement of profit or loss for the year ended 30 September 20X7 in respect of the telephones?
   A.  $4,800
   B.  $4,582
   C.  $4,364
   D.  $5,498 
2. What interest would be charged to Fino’s statement of profit or loss for the year ended
   30 September 20X7 in respect of the plant lease?
   A.  $12,500
   B.  $25,000
   C.  $17,500
   D.  $35,000

Guidance (Tips/ Steps/ Cách tư duy)

1. Telephone is low-value assets 🡪 IAS 17: Dr Lease expense: 20*$240/Cr Cash: 20*$240

Step 1: Identify type of payment: In advance or in arrear

Step 2: 

If payment in arrear: 

Interest = present value of the total lease payments*cost of capital*time-appointed 

If payment in advance: 

Interest = (present value of the total lease payments - rental paid)*cost of capital*time-appointed

Answer: 1A -2A

1. Leased assets are exempt from capitalisation where the lease period is for 12 months or less, or the assets are low-value assets. IFRS 16 Leases does not give a value for what is meant by low-value assets, but gives examples, including telephones. In this case the lease rentals would be charged as an expense within the statement of profit or loss. 

2.

	$
Present value of total lease payments	350,000
Less initial lease rental	(100,000)
Initial lease liability	250,000
Interest to 30 September 20X7 (6 months at 10%)	12,500

1.3. DẠNG 3: Sale and lease back

Câu 7: Calculation in case of sale and lease back

Learning outcome: Tính toán được các giá trị có liên quan trong trường hợp sale and lease back

Question: 

On 1 January 20X6, Sideshow sold a property for its fair value of $2 million, transferring title to the property on that date. Sideshow then leased it back under a 5-year lease, paying $150,000 per annum on 31 December each year. The present value of rentals payable was $599,000 and the interest rate implicit in the lease was 8%. The carrying amount of the property on 1 January 20X6 was $1.6 million and it had a remaining useful life of 20 years.

What entries would be made in Sideshow’s statement of profit or loss for the year ended 31 December 20X6?

A.  Profit on disposal of $280,200, depreciation of $95,840, finance cost of $47,920
B.  Profit on disposal of $400,000, rental expense of $150,000
C.  Profit on disposal of $400,000, depreciation expense of $95,840, finance cost of $47,920
D.  Profit on disposal of $280,200, depreciation of $119,800, finance cost of $47,920

Guidance (Tips/ Steps/ Cách tư duy)

Step 1: Finance cost = Interest rate = Present value*implicit interest rate 

Step 2: Identify control belongs to which party 

If it belongs to Sideshow 🡪 time to calculate depreciation will be useful life year and this is finance leaseback

If it belongs to the purchaser 🡪 time to calculate depreciation will be lease period and this is operating leaseback

Step 3: Calculate depreciation

Deprecation = initial value of the right-of-use asset / time to calculate (in step 2)

Initial value of the right-of-use asset = carrying amount*(Lease payment / fair value)

Step 4: Calculate total gain = Fair value – Carrying amount

Step 5: Calculate gain relating to rights retained = Total gain* (present value of rentals payable/fair value)

Step 6: Calculate actual profit = Gain on rights transferred 

= Total gain – Gain on rights retained 

Answer: A

Finance cost = $599,000 × 8% = $47,920

Depreciation = [(599,000/2,000,000) × 1,600,000]/5 = $95,840

Total gain = $2,000,000 - $1,600,000 = $400,000

Gain on rights retained = $400,000 *$599,000/$2,000,000 = $119,800

Gain on rights transferred = $400,000 - $119,800 = $280,200

2. Topic 8: Provision and events after the reporting period

Ref: Tóm tắt kiến thức Topic 8: Provision and events after the reporting period

Mức Độ: Quan trọng

2.1. DẠNG 1: Provision

Câu 1: Identify a provision

Learning outcome: Xác định được trường hợp nào cần phải trích lập dự phòng

Question: 

Which of the following would require a provision for a liability to be created by BW at its reporting date of 31 October 20X5?

A.  The government introduced new laws on data protection which come into force on 1 January 20X6. BW’s directors have agreed that this will require the large number of staff to be retrained. On 31 October 20X5, the directors were waiting on a report they had commissioned that would identify the actual training requirements.
B.  At the year-end BW is negotiating with its insurance provider about an outstanding insurance claim. On 20 November 20X5, the provider agreed to pay $200,000. 
C.  BW makes refunds to customers for any goods returned within 30 days of the sale and has done so for many years.
D.  A customer is suing BW for damages alleged to have been caused by BW’s product. BW is contesting the claim and on 31 October 20X5, the directors have been advised by BW’s legal advisers that it is very unlikely to lose the case.

Guidance (Tips/ Steps/ Cách tư duy)

Step 1: Identify whether exist present obligation that arises from a past event or not 

If Exist 🡪 Step 2:  Assess whether have probable outflow or not from that obligation 

If Yes 🡪 Step 3: Assess whether outflow can estimate reliably or not 

If Yes 🡪 It is a provision

Answer:  C. BW makes refunds to customers for any goods returned within 30 days of the sale, and has done so for many years.

Answer A is incorrect because the obligation does not exist at the reporting date and also cannot be reliably measured at present. 

Answer B is an example of an adjusting event after the reporting date as it provides evidence of conditions existing at the reporting. 

Answer D is a contingent liability. However, as its likelihood is remote no provision is necessary.

Câu 2: Single even and numerous event

Learning outcome: Xác định được giá trị của khoản trích lập dự phòng

Question: 

Target is preparing its financial statements for the year ended 30 September 20X7. Target is facing a number of legal claims from its customers with regards to a faulty product sold. The total amount being claimed is $3.5 million. Target’s lawyers say that the customers have an 80% chance of being successful. What amount, if any, should be recognised in respect of the above in Target’s statement of financial position as of 30 September 20X7?

Guidance (Tips/ Steps/ Cách tư duy)

Identify an event is a single event or numerous event

If It is a single event 🡪 provision relies on the most likely outcome

If It is numerous event 🡪  provision relies on the expected value

Answer: $3,500,000 million

Câu 3: Effect of time value of money on provision

Learning outcome: Tính toán khoản trích lập dự phòng có ảnh hưởng từ giá trị thời gian của dòng tiền

Question: 

A company knows that when it ceases a certain operation in 5 year-time it will have to pay environmental cleanup costs of $5m.The provision to be made now will be the present value of $5m in 5 year-time. The relevant discount rate in this case is 10%.

Determines Unwinding provision (addition of provision) for the cleanup cost at year 2?

Guidance (Tips/ Steps/ Cách tư duy)

Step 1: Discount cash flow of provision from year 5 to present value 

Step 2: Discount cash flow of provision from year 5 to year 2

Step 3: Unwinding provision at year 2 = Step 2 - Step 1

Answer: 

Cash outflow (present value) = $5m*1/(1+10%)5

Cash outflow (year 2 value) = $5m*1/(1+10%)4

Unwinding provision = $310,460

2.2. DẠNG 2: Adjusting event and Non-adjusting event

Câu 4: Identify adjusting event

Learning outcome: Xác định được 1 sự kiện cần điều chỉnh sau ngày khóa sổ kế toán

Question: 

Using the requirements set out in IAS 10 Events after the Reporting Period, which of the following would be classified as an adjusting event after the reporting period in financial statements ended 31 March 20X4 that were approved by the directors on 31 August 20X4?

A.  A reorganisation of the enterprise, proposed by a director on 31 January 20X4 and agreed by the Board on 10 July 20X4.
B.  A strike by the workforce started on 1 May 20X4 and stopped all production for 10 weeks before being settled.
C.  The receipt of cash from a claim on an insurance policy for damage caused by a fire in a warehouse on 1 January 20X4. The claim was made in January 20X4 and the amount of the claim had not been recognised at 31 March 20X4 as it was uncertain that any money would be paid. The insurance enterprise settled with a payment of $1.5 million on 1 June 20X4.
D.  The enterprise had made large export sales to the USA during the year. The year-end receivables included $2 million for amounts outstanding that were due to be paid in US dollars between 1 April 20X4 and 1 July 20X4. By the time these amounts were received, the exchange rate had moved in favour of the enterprise.

Guidance (Tips/ Steps/ Cách tư duy)

Step 1: Identify the time that event occurred 

Step 2: Assess the effect of that event on FS: whether it provides evidence of conditions existing at the reporting date or not

Answer: C

The warehouse fire is an adjusting event as it occurred before the reporting date. Settlement of the insurance claim should therefore be included in the financial statements.

The other events are non-adjusting as they occurred after the reporting date and do not provide evidence of conditions existing at the reporting date. Issue B is a brand new event, and therefore should not be adjusted. As it is clearly material the event should be disclosed in the notes to the accounts

Câu 5: Identify adjusting event

Learning outcome: Xác định được 1 sự kiện cần điều chỉnh sau ngày khóa sổ kế toán

Question: 

Each of the following events occurred after the reporting date of 31 March 20X5, but before the financial statements were authorised for issue. Identify whether the events would represent adjusting or non-adjusting events. 

	Adjusting	Non-adjusting
A public announcement in April 20X5 of a formal plan to discontinue an operation which had been approved by the board in February 20X5.
The settlement of an insurance claim for a loss sustained in December 20X4.

Answer: 

	Adjusting	Non-adjusting
A public announcement in April 20X5 of a formal plan to discontinue an operation which had been approved by the board in February 20X5.		X
The settlement of an insurance claim for a loss sustained in December 20X4.	X

A board decision to discontinue an operation does not create a liability. A provision can only be made on the announcement of a formal plan (as it then raises a valid expectation that the action will be carried out). As this announcement occurs during the year ended 31 March 20X6, this a non-adjusting event for the year ended 31 March 20X5.

The insurance claim was in existence at the year-end, so this will be an adjusting event as it
provides further evidence of conditions in existence.

3. Topic 9: Inventories and biological assets

Ref: Tóm tắt kiến thức Topic 9: Inventories and biological assets

Mức Độ: Ít quan trọng

3.1. DẠNG 1: Feature of biological assets arcording to IAS 41

Câu 1: Recognition of biological assets

Learning outcome: Nắm được kiến thức liên quan đến ghi nhận tài sản sinh học

Question: 

At what amount is a biological asset measured on initial recognition in accordance with IAS 41 Agriculture?

A.  Production cost
B.  Fair value
C.  Cost less estimated costs to sell
D.  Fair value less estimated costs to sell 

Guidance (Tips/ Steps/ Cách tư duy)

Biological assets are measured at fair value: Net Fair value = Fair value - cost to sell

In case the fair value of biological assets cannot be determined:

Value of biological assets = Cost - Accumulated depreciation - Impairment losses

Answer: D. Fair value less estimated costs to sell 

Câu 2: Recognise gain/loss on biological asset

Learning outcome: Nắm được kiến thức liên quan đến ghi nhận lãi lỗ của tài sản sinh học

Question:

How is a gain or loss arising on a biological asset recognised in accordance with IAS 41?

A.  Included in profit or loss for the year
B.  Adjusted in retained earnings
C.  Shown under 'other comprehensive income
D.  Deferred and recognised over the life of the biological asset 

Answer: A. Included in profit or loss for the year

3.2. DẠNG 2: Inventory

Câu 3: Calculate valuation of inventory

Learning outcome: Nắm được cách tính giá trị hàng tồn kho

Question: 

Caminas Co has the following products in inventory at the year-end. 

Product	Quantity	Cost	Selling price	Selling cost
A	1,000	$40	$55	$8
B	2,500	$15	$25	$4
C	800	$23	$27	$5

At what amount should total inventory be stated in the statement of financial position? 

A.  $95,900
B.  $95,100
C.  $103,100
D.  $105,100 

Guidance (Tips/ Steps/ Cách tư duy)

Step 1: Calculate valuation of NRV = Selling price – Selling cost 

Step 2: Choose the lower value between NRV and Cost

Step 3: Valuation of inventory = Quantity * Lower value between NRV and Cost

Answer: A. $95,100

4. Topic 10: Accounting for taxation

Ref: Tóm tắt kiến thức Topic 10: Accounting for taxation

Mức Độ: Quan trọng

Câu 1: Calculate tax paid

Learning outcome: Biết được cách tính số thuế đã nộp trong kỳ

Question: 

The statements of financial position of Nedburg Co include the following extracts: Statements of financial position as of 30 September 

	20X2 ($m)	20X1($m)
Deferred tax	310	140
Current tax	130	160

The tax charge in the statement of profit or loss for the year ended 30 September 20X2 is $270 million. What amount of tax was paid during the year to 30 September 20X2? 

Guidance (Tips/ Steps/ Cách tư duy)

Tax paid = (Closing tax balance  - opening tax balance) - total tax expense (tax charge)

Opening tax balance = opening current tax liability + opening deferred tax liablity

Closing tax balance = closing current tax liability + closing deferred tax liability 

Answer: $130m

Câu 2: Calculate tax expense

Learning outcome: Biết được cách tính chi phí thuế (tax expense)

Question: 

Tamsin Co’s accounting record shown the following: 

	$
Income tax payable for the year	60,000
Over provision in relation to the previous year	4,500
Opening provision for deferred tax	2,600
Closing provision for deferred tax	3,200

What is the income tax expense that will be shown in the statement of profit or loss for the year?

A.  $54,900
B.  $67,700
C.  $65,100
D.  $56,100 

Guidance (Tips/ Steps/ Cách tư duy)

The tax expense in the statement of profit or loss is made up of the current year estimate, the prior year overprovision, and the movement in deferred tax. 

The prior year overprovision must be deducted from the current year expense, and the movement in deferred tax must be added to the current year expense, as the deferred tax liability has increased

Tax expense 

= Income tax payable for the year + closing tax balance - opening tax balance - over provision

Answer: Tax expense = $60,000 – $4,500 + $600 = $56,100 

Câu 3: Calculate deferred tax liability 

Learning outcome: Biết được cách thuế hoãn lại (Deferred tax)

Question: 

Custard Co purchased an asset costing $1,500. At the end of 20X8, the carrying amount is $1,000. The cumulative depreciation for tax purposes is $900 and the current tax rate is 25%.

Calculate the deferred tax liability for the asset.

Guidance (Tips/ Steps/ Cách tư duy)

Deferred tax = (Accounting base - Tax base) * % Tax rate

Accounting base = Carrying amount = $1,500

Tax base = Cost – depreciation for tax purpose = $1,500 - $900 = $600

Answer: Deferred tax = $400 x 25% = $100

Câu 4: Calculate deferred tax liability 

Learning outcome: Biết được cách thuế hoãn lại (Deferred tax)

Question: 

The following information relates to an entity:

(i) On 1 January 20X8, the carrying amount of non-current assets exceeded their tax written down the value by $850,000.

(ii) For the year to 31 December 20X8 the entity claimed depreciation for tax purposes of $500,000 and charged depreciation of $450,000 in the financial statements. 

(iii) During the year ended 31 December 20X8 the entity revalued a property. The revaluation surplus was $250,000. There are no current plans to sell the property. 

(iv) The tax rate was 30% throughout the year. 

What is the provision for deferred tax required by IAS 12 Income Taxes on 31 December 20X8? 

A.  $240,000
B.  $270,000
C.  $315,000
D.  $345,000 

Guidance (Tips/ Steps/ Cách tư duy)

Provision for deferred tax = Closing deferred tax liability

= Opening deferred tax liability + Increased deferred tax liability

Increased deferred tax liability can derive from 

• The valuation surplus
• Different from depreciation between accounting base and tax base

Answer: D. $345,000 

At 1/1/X8 Carrying amount of NCA exceed their tax written down the value by $850,000

🡪 Opening deferred tax liability = $850,000 * 30% = $255,000 (1)

For the year to 31/12/X8, the entity claimed depreciation for tax purpose of $500,000 and charged depreciation of $450,000 in FS

🡪 Increased deferred tax liability due to different from depreciation between accounting base and tax base = ($500,000 - $450,000) * 30% = $15,000 (2)

The valuation surplus was $250,000

🡪 Increased deferred tax liability due to the valuation surplus = $250,000 * 30% = $75,000 (3)

(1);(2);(3) 🡪 Provision for deferred tax  = $345,000 

5. Topic 11: Reporting financial performance 

Ref: Tóm tắt kiến thức Topic 11: Reporting financial performance 

Mức Độ: Ít quan trọng

5.1. DẠNG 1: Accounting policies, Changes in accounting estimates and Errors

Câu 1: Changes in accounting policy

Learning outcome: Nắm được sự tuân thủ về thay đổi chính sách kế toán theo IAS 8

Question: 

Which of the following would be a change in accounting policy in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors? 

A.  Adjusting the financial statements of a subsidiary prior to consolidation as its accounting policies differ from those of its parent 
B.  A change in reporting depreciation charges as cost of sales rather than as administrative expenses 
C.  Depreciation charged on reducing balance method rather than a straight line
D.  Reducing the value of inventory from cost to net realisable value due to a valid adjusting event after the reporting period 

Guidance (Tips/ Steps/ Cách tư duy)

A change in accounting estimate is an adjustment of the carrying amount of an asset or a liability or the amount of the periodic consumption of an asset that results from the assessment of the present status of, and expected future benefits and obligations associated with, assets and liabilities. 

Changes in accounting estimates result from new information or new developments are not corrections of errors

Answer: B. A change in reporting depreciation charges as cost of sales rather than as administrative expenses

A and D are simply adjustments made during preparation of the financial statements 

C is a change of accounting estimate 

5.2. DẠNG 2: Non-current assets held for sale and discontinued operations 

Câu 2: Recognise NCA held for sale 

Learning outcome: Nắm được các điều kiện để 1 tài sản có thể được phân loại là held for sale

Question: 

For an asset to be classified as 'held for sale' under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations its sale must be 'highly probable'. Which of the following is NOT a requirement if the sale is to be regarded as highly probable?

A.  Management must be committed to a plan to sell the asset.
B.  A buyer must have been located for the asset.
C.  The asset must be marketed at a reasonable price.
D.  The sale should be expected to take place within one year from the date of classification. 

Guidance (Tips/ Steps/ Cách tư duy)

An asset is classified as held for sale when it meets all of the following 7 conditions:

• non-current asset
• plan to sell
• available for immediate sale
• locate a buyer
• within 12 months from the date of classification
• reasonable price
• It is unlikely that significant changes to the plan will be made or that the plan will be withdrawn 

Answer: B. buyer must have been located for the asset.

Just identify a buyer not A buyer must have been located for the asset.

Câu 3: Measured NCA held for sale 

Learning outcome: Nắm được cách đo lường NCA held for sale

Question: 

As of 30 September 20X3 Dune Co's property in its statement of financial position was: 

Property at cost (useful life 15 years)	$45 million
Accumulated depreciation	$6 million

On 1 April 20X4 Dune Co decided to sell the property. The property is being marketed by a property agent at a price of $42 million, which was considered a reasonably achievable price at that date. The expected costs to sell have been agreed at $1 million. Recent market transactions suggest that actual selling prices achieved for this type of property in the current market conditions are 10% less than the price at which they are marketed. At 30 September 20X4 the property has not been sold. At what amount should the property be reported in Dune Co's statement of financial position as at 30 September 20X4? 

A.  $36 million
B.  $37.5 million
C.  $36.8 million
D.  $42 million 

Guidance (Tips/ Steps/ Cách tư duy)

Asset held for sale will be measured at lower of carrying amount and fair value less cost to
sell. Once reclassified, the asset held for sale is not depreciated. 

Step 1: Calculate Carrying amount at 1 April 20X4

Step 2: Calculate Fair value less cost to sell 

Step 3: Compare two above amount 🡪 choose lower amount 🡪 report in SOFP 

Answer: C. $36.8 million

	$m
Cost	45.0
Accumulated depreciation to 30 September 20X3	(6.0)
Depreciation to 1 April 20X4	(1.5)
Carrying amount 1 April 20X4	37.5

Fair value less cost to sell = $42m*90% - $1m = $36.8m < Carrying amount 1 April 20X4 

🡪 Amount should the property be reported = $36.8m 

5.3. DẠNG 3: IAS 21 Foreign currency transactions  

Câu 4: Exchange rate

Learning outcome: Nắm được kiến thức liên quan đến tỷ giá hối đoái (exchange rate)

Question: 

IAS 21 sets out how entities that carry out transactions in a foreign currency should measure the results of these transactions at the year-end. Using the picklist provided, select which exchange rate should non-monetary items carried at historical cost be measured? 

A.  Closing rate 
B.  Average rate 
C.  Rate at date of transaction
D.  Rate at beginning of the year 

Guidance (Tips/ Steps/ Cách tư duy)

• Monetary items are measured at closing rate
• Non-monetary items carried at historical cost should not be re-measured 
• Non-monetary items carried at fair value should be re-measured using the exchange rate as of the FV determination date

Answer: C. Rate at date of transaction

Non-monetary items carried at historical cost should not be re-measured 🡪 using rate at date of transaction

Câu 5: Exchange rate

Learning outcome: Nắm được kiến thức liên quan đến tỷ giá hối đoái (exchange rate)

Question: 

Miston Co buys goods priced at €50,000 from a Dutch company on 1 November 20X8. The invoice is due for settlement in two equal installments on 1 December 20X8 and 1 January 20X9. The exchange rate moved as follows: 

1 November 20X8 - 1.63 to $1

1 December 20X8 - 1.61 to $1

31 December 20X8 - 1.64 to $1

What will be the net exchange gain or loss to be reported in the financial statements of Miston Co on 31 December 20X8?

Guidance (Tips/ Steps/ Cách tư duy)

Step 1: Calculate the amount of money in each period by using an exchange rate

Step 2: Compare the amount of money on 1 November 20X8 with the total amount of money on 1 December 20X8 and 31 December 20X8 

Answer: 

Date	Rate	$	€
1/11	1.63	30,675	50,000
1/12	1.61	15,528	25,000
31/12	1.64	15,244	25,000

Net Exchange = 30,675 – (15,528 + 15,244) = - 97 🡪 Loss

6. Topic 12: Earning per share

Ref: Tóm tắt kiến thức Topic 12: Earning per share

Mức Độ: Quan trọng

6.1. DẠNG 1: Basic EPS

Câu 1: New issue

Learning outcome: Nắm được công thức tính basic EPS trong trường hợp phát hành cổ phiếu mới.

Question: 

An entity, with a year-end of 31 December 20X8, issued 200,000 shares at full market price of $3 on 1 July 20X8. Calculate the EPS for each of the years.

Relevant information

	20X8	20X7
Profit attributable to the ordinary shareholders for the year ending 31 December	$550,000	$460,000
Number of ordinary shares in issue at 31 December	1,000,000	800,000

Guidance (Tips/ Steps/ Cách tư duy)

Basic EPS = profit attributable for ordinary share/ weighted number of share

Weighted number of share = Number of shares * Time weighting

Answer: 

Weighted number of share (20X7) = 800,000

Weighted number of share (20X8) = 800,000 + 200,000*1/2 = 900,000

EPS (20X7) = $460,000/800,000 = 0.58

EPS (20X8) = $550,000/900,000 = 0.61

Câu 2: Bonus issue

Learning outcome: Nắm được cách tính thu nhập trên cổ phần trong trường hợp có phát hành cổ phiếu thưởng.

Question: 

Plumstead Co had 4 million equity shares in issue throughout the year ended 31 March 20X7. On 30 September 20X7, it made a 1 for 4 bonus issue. Profit for the year ended 31 March 20X8 was $3.6 million, out of which an equity dividend of 20c per share was paid. The financial statements for the year ended 31 March 20X7 showed earnings per share (EPS) of $0.70.

What are the EPS for the year ended 31 March 20X8 and the restated EPS for the year ended 31 March 20X7?

Guidance (Tips/ Steps/ Cách tư duy)

Basic EPS = profit attributable for ordinary share/ weighted number of share

Step 1: Calculate the weighted number of share during the period

Weighted number of share = Number of shares * Bonus fraction * Time weighting

Step 2: Calculate profit attributable for ordinary share 

Profit attributable for ordinary share = Profit after tax - Dividend for preferred share

Answer: 

From 1/4/20X7 to 30/9/20X7 (6 months) the total number of shares = 4m 

With bonus fraction = (4+1)/4 = 5/4

From 30/9/20X7 to 31/3/20X8 (6 months) the total number of shares = 5m

With bonus fraction = 1

🡪 Weighted number of share = 4*5/4*6/12 + 5*6/12 = 5m

Profit attributable for ordinary share = $3.6m

EPS 20X8 = $3.6m/5m = $0.72

Profit attributable for ordinary share (20X7 period) = x and EPS 20X7 with 4m shares is $0.70

🡪 x/4m = $0.70 🡪 x = $2.8m

Restated EPS 20X7 with 5m shares = $2.8m/5m = $0.56

Câu 3: Right issue

Learning outcome: Nắm được cách tính thu nhập trên cổ phần trong trường hợp có phát hành cổ phiếu ưu đãi.

Question: 

On 1 January 20X8 Artichoke Co had 5 million $1 equity shares in issue. On 1 June 20X8 it made a 1 for 5 rights issue at a price of $1.50. The market price of the shares on the last day of quotation with rights was $1.80. Total earnings for the year ended 31 December 20X8 was $7.6 million.

What were the earnings per share for the year?

A.  $1.35
B.  $1.36
C.  $1.27
D.  $1.06

Guidance (Tips/ Steps/ Cách tư duy)

Basic EPS = profit attributable for ordinary share/ weighted number of share

Step 1: Calculate TERP

TERP (Theoretical ex-rights issue) = (Market price of one share before issue * Number of shares before issue + Issue value of a new share) / Total actual number of shares after the issue

Step 2: Calculate the weighted number of share during the period

Weighted number of share = Number of shares before issue * FV/TERP * Time weighting + Number of share after issue * Time weighting

Step 3: Calculate profit attributable for ordinary share 

Profit attributable for ordinary share = Profit after tax - Dividend for preferred share

Answer: A. $1.35

Answer: 

TERP = ($1.8*5 + $1.5)/(1+5) = $1.75

Weighted number of share = 5m * (1.8/1.75)*(5/12) + 6m*(7/12) = 5.64m

Profit attributable for ordinary share = $7.6m

🡪EPS 20X8 = $7.6m/5.64m = $1.35

6.2. DẠNG 2: Diluted EPS

Câu 4: Convertible bond

Learning outcome: Nắm được cách tính diluted EPS trong trường hợp công ty phát hành trái phiếu chuyển đổi (Convertible bond)

Question: 

In 20X7 Farrah Co had earnings of $105,000 and 100,000 ordinary $1 shares. It also had in issue $40,000 15% convertible loan stock which is convertible in two years’ time at the rate of 4 ordinary shares for every $5 of stock. The rate of tax is 30%. Calculate the Diluted EPS

Guidance (Tips/ Steps/ Cách tư duy)

Step 1: Calculate the weighted number of share during the period

• Weighted number of share = weighted number of share + number of potential share
• Number of potential share = Value of loan * Number of ordinary shares to convert/value of each stock

Step 2: Calculate interest from the convertible loan

Interest = Value of loan* proportion of convertible loan stock

Step 3: Calculate diluted EPS

Diluted EPS = (profit after tax - dividend for preferred share + interest * (1-tax rate))/(weighted number of share + number of potential share)

Answer: 

Weighted number of share = 100,000 + $40,000*4/$5 = 132,000 

Diluted EPS = ($105,000 + $40,000*15%*(1-0,3))/132,000 = $0.83 

Câu 5: DEPS vs BEPS

Learning outcome: Nắm được cách tính diluted EPS trong trường hợp có sự xuất hiện của cả BEPS

Question: 

Barwell Co had 10 million ordinary shares in issue throughout the year ended 30 June 20X3. On 1 July 20X2, it had issued $2 million of 6% convertible loan stock, each $5 of loan stock convertible into 4 ordinary shares on 1 July 20X6 at the option of the holder. Barwell Co had a profit for the year ended 30 June 20X3 of $1,850,000. It pays tax on profits at 30%.

What was diluted earnings per share for the year?

A.  $0.167
B.  $0.185
C.  $0.161
D.  $0.17

Guidance (Tips/ Steps/ Cách tư duy)

Because DEPS value cannot exceed BEPS → When calculating DEPS index, we need to calculate more BEPS index, and compare the two indexes:

• If DEPS <BEPS → get the value of DEPS 
• If DEPS> BEPS → get the value of DEPS = BEPS 

Answer: A. $0.167

BEPS = $1,85m/10m= 0.185

DEPS = ($1,85m + $2*6%*(1-0.3))/(10m + $2m*4/$5) = $0.167

 

Author: Dat Le