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ACCA SBR 2023 Exam Questions with Complete Solutions
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ACCA SBR 2023 Exam Questions with Complete Solutions
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Not True and Fair What if not followed IAS or IFRS? - ANSWER Principles harder to circumvent Why PRINCIPLES not RULES? - ANSWER Provides guidances for standards setters Why have a FRAMEWORK? - ANSWER RELEVANCE = Influences 2 x Useful qualities of financial information - ANSWER PREDICTIVE VALUE What does RELEVANCE offer? - ANSWER TIMELY 4 X Qualities of FAITHFUL REPRESENTATION - ANSWER accounts are historic - focus on What are framework criticisms? - ANSWER ACCA SBR 2023 Exam Questions with Complete Solutions = UNETHICAL Gives guidance where no standards exist Helps all parties with intrerpretation Decisions FAITHFUL REPRESENTATION = Complete, Neutral, No Errors CONFIRMATORY VALUE UNDERSTANDABLE VERIFIABLE COMPARABLE timeliness Some assets not recognised: - internal goodwill Estimates = subjective = reduces comparability Disclosures = cluttered / generic Cashflows >>>>>>>>> - ANSWER What are three parts of a cashflow? - ANSWER Operations - Day-to-day operations Investing - Long term assets Operating Activities Where do TAXES go? - ANSWER Financing Where does LOAN INCOME go? - ANSWER Investing Where does SALE OF ASSETS go? - ANSWER Profit before * Describe the INDIRECT METHOD for Operating Activities - ANSWER Less: Additions of PPE - Use T Account Method for Investing Activities - ANSWER Add: Proceeds for Share Issue Method for Finance Activities - ANSWER Financing - Equity, Loans TAX* Add: Adjust for Finance Costs (Not Ops) Less: Adjust for Investment Income (Not ops) Add: Depreciation (Not Cash) Less: Gains on Disposals (Non Cash) *Operating Profit before working capital changes* Inventories ( -/+) Receivables ( -/+) Payables (+/-) *Cash generated from Operations* Less: Taxes Paid Less: Interest Paid - *Net Cash from Operations* Add: Proceeds of PPE Sale - Use T Account Add: Interest Received Add Dividends Received Less: Purchase of Investments *Net Cash from Investment* Add: Proceeds from Long -Term Borrowing Less: Dividends Paid *Net Cash from Finance* NB: Do NOT include INTEREST PAID (in Operations) *Profit from Operations* Control What is a subsidiary? - ANSWER Cash at Bank Short Term Investments Cash & Cash Equivalents 1. Power to DIRECT >50% voting rights 2. EXPOSURE to variable returns (Equity) 3. Use Power to Affect Returns Substance > Legal Form Can appoint Directors Can make resoluitions NB Or... Has contracts with others giving control Holds < 50% of voting rights, but remainder widely distributed Holds potential voting rights (eg Convertible) What is an Associate? What accounting should be used? - ANSWER SIGNIFICANT INFLUENCE Power to PARTICIPATE 20-50% Share Capital NB Or... Representation on the board Participation in policy making process Material transaction between the two entities Interchange of managerial personnel Provision of essential technical information Use EQUITY ACCOUNTING -SFP -SPLOCI NB: No NCI for Associates !!!!! What is the treatment for mid-year acquisition? - ANSWER Remove Retained Earnings before Acquisition What is the treatment for Subsidiary Net Assets? - ANSWER Check reporting Date Cash on Hand What are Cash and Cash Equivalents? - ANSWER FV of Consideration What is the treatment for Goodwill - ANSWER Meet the definition of:* * When should something be recognised? - ANSWER Equity Shares (reporting date) Share Premium (reporting date) Retained Earnings (Aq date) PUP S - Seller (Reporting date) FV Adj (At Aquisition/Reporting) Make adjustments on Group Statements Pup - Inventory FV - PPE/wherever NCI at Aq Less: Net assets at Aq Goodwill at Aq (P) Goodwill at Aq (NCI) Less: Impairments to Date - = GOODWILL -asset/liability -income/expense -equity *Be probable* *Be reliably measurable* *NB For intangibles:* -Identifiable -Separable (sold separately) Define: Asset Liability Equity Income Expense - ANSWER AssetThe benefits of buying summaries with Stuvia:
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