AB acquired an investment in a debt instrument on 1 January 20X5 at its nominal value of $25,000, which it intends to hold until maturity. The instrument carried a fixed coupon interest rate of 5%, payable in arrears. Transactions costs of $5,000 were paid in respect of this investment. The effective interest rate applicable to this instrument was estimated at 9%.
Calculate the value of this investment that AB will include in its statement of financial position at 31 December 20X5.
Give your answer to the nearest whole number.
$ ?
Which of the following, in accordance with IFRS 2 Share-based Payments, are only applicable to the accounting treatment of cash settled rather than equity settled share-based payment schemes?
Select ALL that apply.
ST acquired 75% of the 2 million $1 equity shares of CD on 1 January 20X3, when the retained earnings of CD were S3,550,000. CD has no other reserves.
ST paid $5,600,000 for the shares in CD and the non controlling interest was measured at its fair value of S1,400,000 at acquisition.
At 1 January 20X3, the fair value of CD's net assets were equal to their carrying amount, with the exception of a building. This building had a fair value of $1,000,000 in excess of its carrying amount and a remaining useful life of 25 years on 1 January 20X3.
At 31 December 20X5, the retained earnings of ST and CD were $8,500,000 and $5,250,000 respectively.
What is the figure for non-controlling interest to be shown in the consolidated statement of financial position of ST as at 31 December 20X5?
ST has in issue unquoted 7% debentures which were issued at par and are redeemable in 1 year's time. These debentures cannot be traded. The yield to maturity on these debentures has been calculated at 5%.
Which of the following would explain why the yield to maturity is lower than the coupon?
Which of the following examples would be classed as related parties ofJH Ltd due to the power they possess to directly influence the company?
1: JH Ltd's managing director
2: The son of JH Ltd's managing director, who is an intern in the company's office
3: The brother of JH Ltd's managing director, whose business supplies a large amount of production material for the company
4: JH Ltd's subsidiary company, AL Ltd
5: BR PLC, one of JH Ltd's regular customers
You are a Financial Controller at BCD and are in the process of preparing the year-end financial statements. A member of your finance team has come to see you about her provisions balance at year-end.
She says that the Managing Director has asked her to increase the provisions balance by $1 million overall. She thinks this is because BCD has had a very good year in terms of profit, and the Managing Director wants to put some profit aside to protect against any future reductions in profit. $1 million is material to BCD.
You believe that the provisions balance was fairly stated without the additional $1 million.
Which TWO of the following would be appropriate actions in this scenario?
GH is seeking to finance a substantial new project that is guaranteed to enhance the profitability of the entity. Its key determinants in deciding upon the best source of finance are to balance the following requirements:
1) to minimise the costs of issue of the finance;
2) to avoid the need to find cash to repay the source of finance; and
3) to ensure that the long-term gearing level does not increase.
Which of the following financing options best meets these requirements?
On 1 January 20X7 GH purchased plant and equipment at a cost of $400,000. The temporary differences in respect of this plant and equipment at 31 December 20X7 and 20X8 have been calculated as follows:
Assume that there are no other temporary differences in the periods and that the corporate income tax rate is 25%. GH is expected to have significant taxable profits in the future.
Which of the following is the correct impact in GH's statement of financial position at 31 December 20X8 in respect of deferred tax?
Which of the following are limitations of financial statement figures for ratio analysis? Select the ALL that apply.
AB has taxable temporary differences arising from the revaluation of non current assets.
What is the journal entry to record the movement in the provision for deferred tax resulting from this difference?
