Академический Документы
Профессиональный Документы
Культура Документы
1 www.accaapc.com
Lesco Group Limited, April 2015 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Lesco Group Limited.
2 www.accaapc.com
Main study note content [Total Pages: 222] ...................................................... 4 Product Summary .......................................................................................... 6 Live online note sample plan ........................................................................... 7 Live online course timetable: ........................................................................... 8 IAS 19 Employee Benefits and IFRS 2 Share Based Payment ............................. 11 Changes in Ownership .................................................................................. 20
Please note:
This is just the sample study note extracted from the main study note in your tuition study [This tuition study note is consistent in basic/super/gold package]. There would be more chapters in the main study note covering the whole ACCA syllabus. The June2014 P2 APC study note has included all latest changes of accounting standards per IFRS including standards only effective from Jan2014 onwards. You can also take a look at the content within the main study note below:
3 www.accaapc.com
4 www.accaapc.com
5 www.accaapc.com
Product Summary
content Basic package Super package Gold Package Oxford Brookes BSc in Applied Accounting
Last minute revision ACCA Live online tuition(4sessions) ACCA Live online revision(14hours) ACCA Mock exams(with tutor mark) ACCA Tutor support ACCA Electronic study note ACCA Student online forum Pass Guarantee ACCA Final revision mock exam paper ACCA Super Live online session (2030hours) ACCA Super Live online revision (Super 3 days) ACCA 1V1 Career Advice ACCA Extra exam techniques demonstration Live online mentoring
6 www.accaapc.com
Live online note sample plan Live online tuition note plan for June2014 P2 Exam
[Only for super / gold package (there would be a unique plan for gold package)]
Live sessions: [2 hours/session---live online + recorded after class]: Live session1 topic: Important & Potential accounting standards being tested summary + June2012 Q2+ Jun2013 Q2
Live session4 topic: Consolidated statement of profit or loss and other comprehensive income + June 2010 Q1
Live revision note for June2014 P2 exam: [will be available since mid April 2014]: Live revision1+2: [There would be a separate live revision note detailing all past exam questions with answers to go through]
7 www.accaapc.com
8 www.accaapc.com
9 www.accaapc.com
*Please Note: This Timetable may be subjected to future changes. Kindly check regularly for any possible updates.
10 www.accaapc.com
Some companies will offer benefit to its employees. These benefits may include:
1, Short term benefit: (accounting: expense and liability ) Monetary benefit: Wages and salary Paid sick leave Compensated absence. Non-monetary salary: Medical care, housing, cars etc
2, Long term benefit: shares (IFRS2), bonus, etc. (Accounting: easier than pension accounting. Only to show costs, asset and liability if company has invested their money in other instrument before paying for cash)
3, Termination benefit: redundancy payments; early retirement payments etc. (accounting: expense and liability )
Talking about pensions therere two types of pensions within p2 exam. They are defined contribution scheme and defined benefit scheme(well talk about those below)
Company and employee will put the money into the scheme run by the trustee each year and when employees retire then they get the money which is not fixed(defined).
If the trustee did a bad job, eg, invest money into shares and suffered a loss then company didn't have enough money to pay off to the employee then company will have no further obligation for those money.
Company does not recognize the asset and liability in their account because they have transferred all the risks and rewards of these to the trustee or agent.
The company will guarantee the amount of money paid to employees when they retire and this will be based on number of years that employee has worked for company and the their final salary as well.
The company will put money into the pension scheme each year to create pension asset(eg, buying shares etc) to be paid off to employees(settle pension liability) when employees get retired.
The question is whether company will have sufficient pension asset to pay off the pension liability? So the company will employ an actuary to value the pension asset and liability each money and any deficit occurred would require the company to put money into it again.
Dose the company recognize the asset and liability in its financial statements? Well the answer is yes because the company hasn't transferred the risks and rewards to the trustee because company has to paid off to settle the pension liability even if the trustee has done a bad job (eg,lose money into its assets.)
The actuary would value the pension asset and liability based on a number of assumptions:
Level of investment return from pension assets Number of income/outgoing employees etc.
14 www.accaapc.com
The accounting for this is to separate assets and liabilities. (remain in companys account) Disclosure: Asset
b/f bal Return on asset Contributions in Benefits out Actuarial gains/losses c/f bal b/f bal Interest cost Service cost Benefits out Actuarial gains/losses c/f bal
Liability
Accounting:
b/f bal (c/f from last year by actuary) Return on asset(discount rate X b/f) DR asset CR I/S
Interest cost (discount rate X b/f): DR I/S CR liability Contributions in (company putting money in): DR asset CR cash (only cash item) Service cost (including current&past service cost: employees work for you and you have to pay for them): DR I/S CR liability Benefits out (money paid to those retired): DR liability CR asset
c/f(by actuary then b/f to next year) Actuarial gains/losses: Gain: DR liability CR OCI Loss: DR OCI CR liability
15 www.accaapc.com
Q Mini Ltd (short term benefit, similar to termination benefit) The employees of Mini Ltd are entitled to a 10 days compensated absence in the year costing $10,000.
Required: So how does the company deal with this transaction (i) Supposing the cash is not paid at the year end (ii) company pays for the employees in the next year.
16 www.accaapc.com
$m Opening PV of pension obligation Closing PV of pension obligation Opening FV of pension asset Closing FV of pension asset Current service cost Pension benefits paid Contribution paid by company Discount rate 990 1100 1000 1190 130 150 90 10%
BBQ Ltd has anther defined contribution scheme in which it pays $30m each year end.
Required: Show how to account for the above pension schemes: 1, Showing the disclosures of the defined benefit scheme and financial statement effects relating to it. (5marks) 2, Journals relating to it. (2marks)
(1mark)
Q Mal (past Q Macaljoy Rewritten[IAS 19]) Mal, a public limited company, is a leading support services company which focuses on the Human Resource Management industry. The company would like advice on how to treat certain items under IAS 19 Employee benefits. The company operates the Mal Pension Plan B which commenced on 1 November 2012 and the Mal Pension Plan A, which was closed to new entrants from 31 October 2012, but which was open to future service accrual for the employees already in the scheme. The assets of the schemes are held separately from those of the company in funds under the control of trustees. The following information relates to the two schemes.
Mal Pension Plan A The terms of the plan are as follows. (i)Employees contribute 6% of their salaries to the plan. (ii)Mal contributes, currently, the same amount to the plan for the benefit of the employees. (iii)On retirement, employees are guaranteed a pension which is based upon the number of years service with the company and their final salary.
The following details relate to the plan in the year to 31 October 2013: $m Present value of obligation at 1 November 2012 Present value of obligation at 31 October 2013 Fair value of plan assets at 1 November 2012 Fair value of plan assets at 31 October 2013 Current service cost Pension benefits paid Total contributions paid to the scheme for year to 31 October 2013 18 www.accaapc.com 200 240 190 225 20 19 17
Mal Pension Plan B Under the terms of the plan, Mal does not guarantee any return on the contributions paid into the fund. The companys legal and constructive obligation is limited to the amount that is contributed to the fund. The following details relate to this scheme: $m Fair value of plan assets at 31 October 2013 Contributions paid by company for year to 31 October 2013 Contributions paid by employees for year to 31 October 2013 The interest rate for Plan A is 5%. The Mal Pension Plan A is wound up at the year end. The market value of the plan assets is unchanged by the curtailment. But the liability is affected. The employees departing the scheme agree to receive the plan assets in full plus a further payment of $16m. The cash was paid just before the year end. 1 year later, Mal has a new defined benefit pension scheme with new employees. This scheme is in surplus with an asset value of $100m and a liability value of $85m. And because the asset exceeds the liability, it is expected that in the future it will be possible to reduce contributions into the scheme. The present value of the reductions in future contributions is only $10m. Required: (a) Discusses the nature of and differences between a defined contribution plan and a defined benefit plan with specific reference to the companys two schemes. (10 marks) (b) Shows the accounting treatment for the two Mal pension plans for the year ended 31 October 2013 under IAS 19 Employee benefits (revised 2011). (7 marks) 21 10 10
(c)Show how to account for the curtailment in the financial statements. (3marks)
(d) Show the effect of the above asset ceiling on the current financial statements.(3marks) 19 www.accaapc.com
Changes in Ownership 1 2 3 4
0%
20%
50%
100%
2, 20%-50%: associate: equity accounting(growth in I/S and added to cost of investment in SOFP ) 3, >50%-<50%: step acquisition: calculate goodwill using 1st and 2nd investment. SOFP FV of 1st investment FV of 2nd investment FV of NCI FV of business FV of Net asset Goodwill at acq X X X X (X) X FV of 1st investment Cost of 1st investment Gains/losses(I/S) X (X) X SOCI
20 www.accaapc.com
4, <50%-100%: still control Equity adjusting: DR NCI (decrease) CR Cash DR/CR retained earnings(equity)(transaction between owner controlled) -CR side means theres increase in controlling interest -DR side means theres decrease in controlling interest -NCI: decrease NCI%XNCI @ disposal date
5, 100%-<50%: still control DR Cash CR NCI DR/CR retained earnings(equity)(transaction between owner controlled) -CR side means theres increase in controlling interest -DR side means theres decrease in controlling interest -NCI: NCI%X(goodwill@disposal+ Net asset@disposal) (consider impariment) 6, 100%->50%: loss control: deem sale of whole group Cash in NCI Remaining(either investment/associate) Total business@disposal Total things left@disposal Goodwill at disposal(consider impairment) Net assets at disposal(growth?) Gain/losses(X-Y)-I/S [gain/loss on disposal of sub] 21 www.accaapc.com X1 X2 X3 X Y Y1 Y2
Share capital of Association Ltd at the date of acquisition was $30,000 and retained earnings at the consolidation date was $440,000 and at date of acquisition was $300,000.
22 www.accaapc.com
Required: Calculate the above effect on the statement of financial position and I/S. (note: goodwill needs to be split between parent and subsidiary)
23 www.accaapc.com
More Ltd acquires a further 5% of Less ltd for $24m. Less ltd has made profits and grown by $20m over the year and the carrying value of identifiable net assets of Less ltd is $200m at the year end.
24 www.accaapc.com
Distort Ltd Bought Innocent Ltd on 1 March 2015 where the goodwill arising is $115m and the FV of NCI at that time was $45m and the group value the NCI at its fair value. Distort Ltd disposes of 10% of shares of Innocent Ltd for $55m and so reduces its ownership to 80%. The carrying value of identifiable net assets of Innocent Ltd is $400m at the year end.
25 www.accaapc.com
On 31st Dec2014, Complete Ltd sells 15% of Nothing Ltd for $150m and loses control, but retains influence through its remaining 45% ownership. The fair value of the associate retained is measured at $400m.
On 31st DEC2014 Nothing Ltd had identifiable net assets of $440m. The growth of Nothing Ltd is $30m.
26 www.accaapc.com