Summary ACCA Financial Reporting Complete Latest 2023/2024

IAS 1 Presentation of Financial Statements - Correct Answer States that a complete set of financial statements comprises: - A statement of financial position - A statement of profit or loss and other comprehensive income - A statement of changes in equity - A statement of cash flows - Accounting policies and explanatory notes Property, plant, and equipment (IAS 16) - Correct Answer Tangible assets held by an entity for more than one accounting period for use in the production or supply of goods or services, for rental to others, or for administrative purposes Property, plant and equipment: Recognition - Correct Answer Recognised as an asset when: - it is probable that future economic benefits associated with the asset will flow to the entity; and - the cost of the asset can be measured reliably (IAS 16, para 7). Property, plant and equipment: Initial measurement - Correct Answer - All costs involved in bringing the asset into working condition - Initial cost capital costs such as the cost of site preparation, delivery costs, installation costs, borrowing costs - Dismantling costs - the present value of these costs should be capitalised - Expense items, such as fuel, training and warranty costs, should be written off as incurred Present Value: Discounting fraction - Correct Answer 1/(1 + r)^n i.e. Present value = Cost x 1/(1+r)^n r = Rate or Interest rate n = Number of years Depreciation - Correct Answer Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life (IAS 16, para 6). Depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value (IAS 16, para 6)