Financial Reporting F7 ACCA 2024 Exam Questions and Answers

Financial Reporting F7 ACCA 2024 Exam Questions and Answers purpose of financial reporting - ANSWERto provide information to the users i.e. creditor, lendor and investers. they are the primary users IFRS 9 effective interest rate table - ANSWERAC B/F... interest expense... interest paid.... AC C/F. BF+IE-IP=CF intangible Asset Conditions - ANSWER1. no physical existence 2. should be non monetary .... not cash not receivable but PPE 3. Seperable or Identifiable. we can seperate it. 6 stages to capitalize the development cost - ANSWER1. P. Probable chances of economic benefit 2. I. intention to complete. 3. R. Resources available to complete (Finance) ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 2/32 4. A. Ability to use and sell ( can u sell) 5. T. Technical Resource. (do u have advanced technology or qualified labours) 6. E. Expenditure Reliably Measured. (PIRATE) Lease Amortisation Schedule IFRS 16 Leases - ANSWERExpenses: rentals...interest expense...interest paid....decrease in lease obligation ... balance obligation income: rentals..interest income...interest received...decrease in lease... balance obligation iAs 23 borrowing cost. when to capitalize borrowing cost - ANSWER1. company started construction wing cost is incurred (u have taken loan) 3. Grt future economics benefits ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 3/32 adjusting events example IAS 10 - ANSWER1. bad debts written off. 2. inventory sold out after year end for less than cost 3. Fraud and error discovered after the year end. existed at SOFP date 4. court case outstanding at year end, and is settled after year end. 5. determination of bonus after year end. 6. dividend declared during the year 7. When going concern status is disturbed then it is an adjusting event Non adjusting events example IAS 10. - ANSWERwont adjust in past year financial statements. 1. Stock Burnt 2. earthquake 3. Sudden fall in the value of investment 4. Strike by labours after year end 5. issue of share 6. issue of loan ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 4/32 7. Divident declared after year end 8. Dividend proposed IAS 12 SOFP approach - ANSWER IFRS 15 - Revenue from Contracts with Customers 5 stages - ANSWER1. identification of contract 2. identification of performance obligation 3. transaction price. what u get 4. allocation of transaction prices apportionment (based on stand alone prices (individual price)) 5. book revenue .. point in time... over time. Deffered Income - ANSWERit is a liability account IFRS 15 Revenue from contract, construction accounting - ANSWER1. calculate total profit or loss 2. calculate stage of completion through a. input methid. incurred cost to date/total estimated cost b. output mehtod. value of worked satisfied/total contract price l ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 5/32 3. P&L extract total revenue x percentage = total cost x percentage = = profit 4. SOFP extract actual cost incurred to date..... add/less: profit/loss recognized to date less: progress billings = contract asset/liability if positive then asset if minus figure tha liability Earning per share (EPS) - ANSWERprofit After tax less irredeemable p