ACADEMY OF FINANCE INTERNATIONAL FINANCIAL REPORTING STANDARDS

Code: 01/2022 Time: 2 days

Task 1:

Goldenkey has internally developed intangible assets comprising the capitalised expenses of the
acquisition and production of electronic map data which indicates the main fishing grounds in the
world.
The intangible assets generate revenue for the company in their use by the fishing fleet and are a
material asset in the statement of financial position.
Goldenkey had constructed a database of the electronic maps. The costs incurred in bringing the
information about a certain region of the world to a higher standard of performance are capitalised.
Required: Discuss the principles and practices to be used by Goldenkey in accounting for the
above valuation and recognition issues.
Task 2:

A company acquired new software for a robot that would revolutionise its manufacturing process.
The costs were:
Original cost of the software X1

Discount provided 5%

Staff training incurred in operating the robot 400

Testing of the software 100

Allocated administrative expenses 50

1. Provide relevant X1 and calculate the cost of this intangible asset?
2. The software was amortised at the rate of 20% using reducing balance method. After three years,
its fair value was X2 and estimated cost to sell was X3. The value in use of the software at that
time was X4. In the year, there was an economic crisis and the company wished to make an
impairment review for its assets.
Required: Provide relevant X2, X3, X4 so that there is an impairment loss of the software.
Calculate and explain your work.
Task 3:

Paco Co purchased 1,450,000 ordinary shares in Suco Co in 20X0, when the general reserve of
Suco stood at 400,000 and there were no retained earnings.
The statements of financial position of the two companies as at 31 December 20X4 are set out
below. (Units: CU)

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 Paco Suco
000 000
Assets
Non current
Property, plant and equipment 8,868 1,787
Investment in Suco at cost 1,45
10,318 1,787
Current assets
Inventories 1,983 1,425
Receivables 1,462 1,307
Cash 25 16
3,47 2,748
Total assets 13,788 4,535
Equity and liabilities
Equity
Share capital (50c ordinary shares) 5,500 1,000
General reserve 1,200 800
Retained earnings 485 100
Total equity 7,185 1,900
Non-current liabilities
Borrowings 10% 4,000
Borrowings 15% - 500
Total non-current liabilities 4,000 500
Current liabilities
Bank overdraft 1,176 840
Trade payables 887 1,077
Taxation 540 218

Total current liabilities 2,603 2,135

Total liabilities 6,603 2,635
Total equity and liabilities 13,788 4,535

At the end of the reporting period the current account of Paco with Suco was agreed at X1 owed
by Suco. This account is included in the appropriate receivable and trade payable balances shown
above. There has been no impairment of goodwill since the date of acquisition. It is the group's
policy to value the non-controlling interest at its proportionate share of the fair value of the
subsidiary's net assets.

Required:
1/ Filling in X1 with reasonable data
2/ Prepare a consolidated statement of financial position for the Paco Suco Group at 31 December
20x4.
3/ Show the alterations necessary to the group statement of financial position if the intragroup
balance owed by Suco to Paco represented an invoice for goods sold by Paco to Suco at a mark-
up of 15% on cost, and still unsold by Suco at 31 December 20X4.

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 INTERNATIONAL FINANCIAL REPORTING STANDARDS
ACADEMY OF FINANCE Time: 2days
Code: 02/2022

Task 1:

Gasnature is finalising its financial statements for the year ended 31 August 20X5 and has
the following issues. Gasnature purchased a major refinery on 1 January 20X5 and the
directors estimate that a major overhaul is required every two years. The costs of the
overhaul are approximately $5 million which comprises $3 million for parts and equipment
and $2 million for labour.
Required: Discuss, with reference to International Financial Reporting Standards, how
Gasnature should account for the above agreement and contract, and the issues raised by
the directors
Task 2:

Mocy Co acquired a subsidiary on 1 January 20X9 for $ X1 million. The fair value of the net assets
of the subsidiary acquired were $ X2 million. Mocy Co acquired 80% of the shares of the
subsidiary. The non controlling interest was fair valued at $ X3 million.

Required:

1/Give necessary information in X1, X2, X3

2/Calculate goodwill based on the partial and full goodwill methods under IFRS 3 (including
comments on these two methods)

Task 3:

Paco Co purchased 1,450,000 ordinary shares in Suco Co in 20X0, when the general reserve of
Suco stood at 400,000 and there were no retained earnings.
The statements of financial position of the two companies as at 31 December 20X4 are set out
below. (Units: CU)

Ghi chú: Cán bộ coi thi không giải thích gì thêm

 Paco Suco
000 000
Assets
Non current
Property, plant and equipment 8,868 1,787
Investment in Suco at cost 1,45
10,318 1,787
Current assets
Inventories 1,983 1,425
Receivables 1,462 1,307
Cash 25 16
3,47 2,748
Total assets 13,788 4,535
Equity and liabilities
Equity
Share capital (50c ordinary shares) 5,500 1,000
General reserve 1,200 800
Retained earnings 485 100
Total equity 7,185 1,900
Non-current liabilities
Borrowings 10% 4,000
Borrowings 15% - 500
Total non-current liabilities 4,000 500
Current liabilities
Bank overdraft 1,176 840
Trade payables 887 1,077
Taxation 540 218

Total current liabilities 2,603 2,135

Total liabilities 6,603 2,635
Total equity and liabilities 13,788 4,535

At the end of the reporting period the current account of Paco with Suco was agreed at X1 owed
by Suco. This account is included in the appropriate receivable and trade payable balances shown
above. There has been no impairment of goodwill since the date of acquisition. It is the group's
policy to value the non-controlling interest at its proportionate share of the fair value of the
subsidiary's net assets.
Required:

1/ Filling in X1 with reasonable data

2/ Prepare a consolidated statement of financial position for the Paco Suco Group at 31 December
20x4.
3/ Show the alterations necessary to the group statement of financial position if the intragroup
balance owed by Suco to Paco represented an invoice for goods sold by Paco to Suco at a mark-
up of 15% on cost, and still unsold by Suco at 31 December 20X4.

Ghi chú: Cán bộ coi thi không giải thích gì thêm

 ACADEMY OF FINANCE INTERNATIONAL FINANCIAL REPORTING STANDARDS
Code: 03/2022 Time: 2days

Task 1:

Header PLC has decided to close one its overseas branches. A board meeting was held on 30 April
20X7 when a detailed formal plan was presented to the board. The plan was formalized and
accepted at that meeting. Letters were sent out to customers, suppliers and workers on 15 May
20X7 and meetings was held prior to the year end to determine the issues involved in the closure.
The plan is to be implemented on June 20X7. The company wishes to provide $8 million for the
restructuring but is unsure as to whether this is permissible.
Additionally there was an issue raised at one of the meetings. The operations of the branch are to
be moved to another country from June 20X7 but the operating lease on the present buildings of
the branch is non-cancellable and runs for another two years, until 31 May 20X9. The annual rent
of the buildings is $150,000 payable in arreas on 31 May and the lessor has offered to take a single
payment of $190,000 on 31 May 20X8 to settle the outstanding amount owing and terminate the
lease on that date. Header has additionally obtained permission to sublet the building at a rental of
$100,000 per year, payable in advance on 1 June.
A discount rate of 8% should be used where necessary.
Required: Discuss the accounting treatments of the above items in the financial statements for the
year ended 31 May 20X7.
Task 2:

A company acquired new software for a robot that would revolutionise its manufacturing process.
The costs were:
Original cost of the software X1

Discount provided 5%

Staff training incurred in operating the robot 400

Testing of the software 100

Allocated administrative expenses 50

1. Provide relevant X1 and calculate the cost of this intangible asset?
2. The software was amortised at the rate of 20% using reducing balance method. After three years,
its fair value was X2 and estimated cost to sell was X3. The value in use of the software at that
time was X4. In the year, there was an economic crisis and the company wished to make an
impairment review for its assets.
Required: Provide relevant X2, X3, X4 so that there is an impairment loss of the software.
Calculate and explain your work.
Task 3:

Paco Co purchased 1,450,000 ordinary shares in Suco Co in 20X0, when the general reserve of
Suco stood at 400,000 and there were no retained earnings. The statements of financial position of
the two companies as at 31 December 20X4 are set out below. (Units: CU)

Ghi chú: Cán bộ coi thi không giải thích gì thêm

 Paco Suco
000 000
Assets
Non current
Property, plant and equipment 8,868 1,787
Investment in Suco at cost 1,45
10,318 1,787
Current assets
Inventories 1,983 1,425
Receivables 1,462 1,307
Cash 25 16
3,47 2,748
Total assets 13,788 4,535
Equity and liabilities
Equity
Share capital (50c ordinary shares) 5,500 1,000
General reserve 1,200 800
Retained earnings 485 100
Total equity 7,185 1,900
Non-current liabilities
Borrowings 10% 4,000
Borrowings 15% - 500
Total non-current liabilities 4,000 500
Current liabilities
Bank overdraft 1,176 840
Trade payables 887 1,077
Taxation 540 218

Total current liabilities 2,603 2,135

Total liabilities 6,603 2,635
Total equity and liabilities 13,788 4,535

At the end of the reporting period the current account of Paco with Suco was agreed at X1 owed
by Suco. This account is included in the appropriate receivable and trade payable balances shown
above. There has been no impairment of goodwill since the date of acquisition. It is the group's
policy to value the non-controlling interest at its proportionate share of the fair value of the
subsidiary's net assets.

Required:
1/ Filling in X1 with reasonable data
2/ Prepare a consolidated statement of financial position for the Paco Suco Group at 31 December
20x4.
3/ Show the alterations necessary to the group statement of financial position if the intragroup
balance owed by Suco to Paco represented an invoice for goods sold by Paco to Suco at a mark-
up of 15% on cost, and still unsold by Suco at 31 December 20X4.

Ghi chú: Cán bộ coi thi không giải thích gì thêm

 INTERNATIONAL FINANCIAL REPORTING STANDARDS
ACADEMY OF FINANCE Time: 2days
Code: 04/2022

Task 1:

A vendor enters into a contract with a customer to supply a licence for a standard ‘off the shelf’
software package, install the software, and to provide unspecified software updates and technical
support for a period of two years. The vendor sells the licence and technical support separately,
and the installation service is routinely provided by a number of other unrelated vendors. The
software will remain functional without the software updates and technical support.

Question: Provide your own assumption, then show how to recognize revenue in each
circumstance.

Task 2:

Mocy Co acquired a subsidiary on 1 January 20X9 for $ X1 million. The fair value of the net assets
of the subsidiary acquired were $ X2 million. Mocy Co acquired 80% of the shares of the
subsidiary. The non controlling interest was fair valued at $ X3 million.

Required:

1/Give necessary information in X1, X2, X3

2/Calculate goodwill based on the partial and full goodwill methods under IFRS 3 (including
comments on these two methods)

Task 3:

Paco Co purchased 1,450,000 ordinary shares in Suco Co in 20X0, when the general reserve of
Suco stood at 400,000 and there were no retained earnings.
The statements of financial position of the two companies as at 31 December 20X4 are set out
below. (Units: CU)

Paco Suco
000 000
Assets
Non current
Property, plant and equipment 8,868 1,787
Investment in Suco at cost 1,45
10,318 1,787
Current assets
Inventories 1,983 1,425
Receivables 1,462 1,307
Cash 25 16
3,47 2,748
Total assets 13,788 4,535

Ghi chú: Cán bộ coi thi không giải thích gì thêm

Equity and liabilities
Equity
Share capital (50c ordinary shares) 5,500 1,000
General reserve 1,200 800
Retained earnings 485 100
Total equity 7,185 1,900
Non-current liabilities
Borrowings 10% 4,000
Borrowings 15% - 500
Total non-current liabilities 4,000 500
Current liabilities
Bank overdraft 1,176 840
Trade payables 887 1,077
Taxation 540 218

Total current liabilities 2,603 2,135

Total liabilities 6,603 2,635
Total equity and liabilities 13,788 4,535

At the end of the reporting period the current account of Paco with Suco was agreed at X1 owed
by Suco. This account is included in the appropriate receivable and trade payable balances shown
above. There has been no impairment of goodwill since the date of acquisition. It is the group's
policy to value the non-controlling interest at its proportionate share of the fair value of the
subsidiary's net assets.

Required:
1/ Filling in X1 with reasonable data
2/ Prepare a consolidated statement of financial position for the Paco Suco Group at 31 December
20x4.
3/ Show the alterations necessary to the group statement of financial position if the intragroup
balance owed by Suco to Paco represented an invoice for goods sold by Paco to Suco at a mark-
up of 15% on cost, and still unsold by Suco at 31 December 20X4.

Ghi chú: Cán bộ coi thi không giải thích gì thêm

 INTERNATIONAL FINANCIAL REPORTING STANDARDS
ACADEMY OF FINANCE
Code: 05/2022 Time: 2days

Task 1:

The definitions of an asset and a liability are discussed in the Framework of IFRS. IASB revised
the following definitions:
(a) an asset is a present economic resource controlled by the entity as a result of past events.
(b) a liability is a present obligation of the entity to transfer an economic resource as a result of
past events.
(c) an economic resource is a right, or other source of value, that is capable of producing economic
benefits.
Do you agree with these definitions? Why or why not?
Task 2:

A company acquired new software for a robot that would revolutionise its manufacturing process.
The costs were:
Original cost of the software X1

Discount provided 5%

Staff training incurred in operating the robot 400

Testing of the software 100

Allocated administrative expenses 50

1. Provide relevant X1 and calculate the cost of this intangible asset?
2. The software was amortised at the rate of 20% using reducing balance method. After three years,
its fair value was X2 and estimated cost to sell was X3. The value in use of the software at that
time was X4. In the year, there was an economic crisis and the company wished to make an
impairment review for its assets.
Required: Provide relevant X2, X3, X4 so that there is an impairment loss of the software.
Calculate and explain your work.
Task 3:

Paco Co purchased 1,450,000 ordinary shares in Suco Co in 20X0, when the general reserve of
Suco stood at 400,000 and there were no retained earnings.
The statements of financial position of the two companies as at 31 December 20X4 are set out
below. (Units: CU)

Ghi chú: Cán bộ coi thi không giải thích gì thêm

 Paco Suco
000 000
Assets
Non current
Property, plant and equipment 8,868 1,787
Investment in Suco at cost 1,45
10,318 1,787
Current assets
Inventories 1,983 1,425
Receivables 1,462 1,307
Cash 25 16
3,47 2,748
Total assets 13,788 4,535
Equity and liabilities
Equity
Share capital (50c ordinary shares) 5,500 1,000
General reserve 1,200 800
Retained earnings 485 100
Total equity 7,185 1,900
Non-current liabilities
Borrowings 10% 4,000
Borrowings 15% - 500
Total non-current liabilities 4,000 500
Current liabilities
Bank overdraft 1,176 840
Trade payables 887 1,077
Taxation 540 218

Total current liabilities 2,603 2,135

Total liabilities 6,603 2,635
Total equity and liabilities 13,788 4,535

At the end of the reporting period the current account of Paco with Suco was agreed at X1 owed
by Suco. This account is included in the appropriate receivable and trade payable balances shown
above. There has been no impairment of goodwill since the date of acquisition. It is the group's
policy to value the non-controlling interest at its proportionate share of the fair value of the
subsidiary's net assets.

Required:
1/ Filling in X1 with reasonable data
2/ Prepare a consolidated statement of financial position for the Paco Suco Group at 31 December
20x4.
3/ Show the alterations necessary to the group statement of financial position if the intragroup
balance owed by Suco to Paco represented an invoice for goods sold by Paco to Suco at a mark-
up of 15% on cost, and still unsold by Suco at 31 December 20X4.

Ghi chú: Cán bộ coi thi không giải thích gì thêm