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| Section | Weight | Objectives |
|---|---|---|
| Financial Reporting Standards | 25% | - IFRS framework and application - Revenue recognition (IFRS 15) - Financial instruments (IFRS 9) - Leases (IFRS 16) |
| Analysing Financial Statements | 15% | - Limitations of financial analysis - Ratio analysis and interpretation - Impact of accounting policies |
| Financing Capital Projects | 15% | - Sources of long-term finance - Cost of capital calculations - Capital structure theories |
| Integrated Reporting | 10% | - Integrated reporting framework - Sustainability and non-financial disclosures |
| Group Accounts | 35% | - Foreign currency consolidation - Consolidated financial statements - Goodwill and non-controlling interest - Associates and joint ventures |
The IAS definitions of financial instruments dictate their classification between debt and equity. Which of of the following factors might this classification impact?
Select ALL that apply.
Correct Answer: A 🗳️
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.
$ ?
Correct Answer:
31450
The dividend yield of ST has fallen in the year to 31 May 20X5, compared to the previous year.
The share price on 31 May 20X4 was $4.50 and on 31 May 20X5 was $4.00. There were no issues of share capital during the year.
Which of the following should explain the reduction in the dividend yield for the year to 31 May 20X5 compared to the previous year?
Correct Answer: C 🗳️
LM has made the following share purchases during the year:
* Purchased 55% of the equity share capital of OP.
* Purchased 45% of the equity share capital of QR. LM have the power to appoint the majority of board members on the QR board.
* Purchased 30% of the equity share capital of ST. LM is represented by one director on the main board of ST which has five members in total. The other 70% of ST's equity share capital is owned by a single company, UV.
The Managing Director has told you that OP has performed well, but both QR and ST have not performed as expected. He is therefore pleased that OP will be included as a subsidiary and that QR and ST will only be included as investments in the group financial statements.
In accordance with the ethical principle of professional competence and due care how should the investments in OP, QR and ST be treated in the group financial statements?
Correct Answer: A 🗳️
ST acquired two financial investments in the year to 31 December 20X8. One of these investments was initially classified as held for trading, the other as available for sale. ST remeasured both investments at fair value at 31 December 20X8 in accordance with IAS 39 Financial Instruments: Recognition and Measurement. The resulting gains were calculated as follows:
* Gain on held for trading investment $50,000
* Gain on available for sale investment $40,000
What was the value of the gain that ST presented in its other comprehensive income when it prepared its financial statements for the year to 31 December 20X8?
Give your answer to the nearest $000.
$ ? 000
Correct Answer:
40, 40000
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