TECHNICAL INTEGRATION

2014 JULY 2015

CORPORATE REPORTING - STUDY MANUAL
Errata and clarifications

Page 14-15, Corporate Reporting technical knowledge grid

IAS 31 should be omitted.
IAS 27 should be named: Separate Financial Statements.
IAS 28 should be named: Investments in Associates and Joint Ventures.
IFRS 10 13 should be included as examinable at Level A for the Advanced Stage.

C1, P6
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Gains on property revaluation
Investment in equity instruments (IFRS 9)
Items that may be reclassified subsequently to profit or loss:
Available for sale financial assets (IAS 39)
Exchange differences on translating foreign operations

X
(X)

X
X

X
X

X
X

C8, P297
Please see below for amendments to the answer for interactive question 4:
Statement of comprehensive income extract
Current service cost
Net interest on net defined benefit liability ( 344 388)
Interest cost (4,300 5.2%)
Curtailment cost
Other comprehensive income
Actuarial gain on obligation
Return on plan assets (excluding amounts in net interest

'000
275
56
224
58
389
107
7

C12, P487
Worked example: deferred tax and retirement benefits: please delete where indicated:
In the tax regime in which Celia operates, a tax deduction is allowed on payment of pension
benefits. No tax deduction is allowed for contributions made to the scheme. Gains and losses on
pension scheme assets are tax exempt.

ICAEW 2014

C14, P549
Basic earnings per share 20X7
900
= 2.50
(200 + 400)

Answer should be 1.50 not 2.50

TAXATION - STUDY MANUAL

Errata and clarifications
C1, P13, Worked Example
The solution should state:
The R&D tax credit is 10% 860,000 = 86,000
The current year CT liability is 20% of the chargeable gain, ie 50,000. First the credit pays the
current year liability. The remaining credit is therefore 36,000.
The first cap is applied: the net value of the set-off amount is 66,220 (ie 86,000 23%
86,000), so there is no cap.
The PAYE and NIC cap is then applied to the remaining credit. As the PAYE and NIC is more than
the amount of the credit, there is no cap.
36,000 is payable by HMRC to the company.
C5, P138, Worked Example
The solution should state:

Under the standard instalment method, the tax would be payable in 6 equal annual
instalments of 46,958. The first instalment would be due on 1 October 2014 (being nine
months and one day after the end of the AP on 31 December 2013 migration ends the AP),
and the later instalments on the anniversary of that date.

Under the realisation method, the tax relating to the factory and the trading stock would be
deferred until the earlier of the asset being sold (which is likely to be soon in the case of the
trading stock) and 31 December 2023, which is the tenth anniversary of the end of the
accounting period of migration. The tax relating to the goodwill would be due in ten annual
instalments of 11,500 (1/10 x 23% x 500,000) starting on 1 October 2014, unless the
goodwill is sold within ten years of migration in which case the balance of the tax is due
immediately.

C2, P58, Section 3.2.3

The final sentence in this section should state:
For SEIS income tax relief purposes, the investor need not be UK resident.

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C2, P385, Worked Example

The second sentence in the worked example should state:
She is resident and domiciled in the UK.
C13, P392, Solution to Self-test question 4
The final part of the solution has been omitted:
If no remittance basis claim is made, Nitin's gains will be taxed on an arising basis but with the
benefit of the AEA:

Less: annual exempt amount

Taxable gains

25,000
82,000
107,000
(10,900)
96,100

His CGT liability will be:

96,100 28% (AR taxpayer)

26,908

UK gains
Non-UK gains

Nitin's total income tax and capital gains tax liability:

(78,348 + 26,908)

105,256

Therefore Nitin should claim the remittance basis for 2013/14.

C14, 398, Interactive question 1
Steves salary is incorrectly stated to be 9,000. Steves salary should be 10,000.

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AUDIT AND ASSURANCE - STUDY MANUAL

Errata and clarifications

C1, P6 & P7
The diagram in Section 3.1 should be deleted and replaced with the following:

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Point to note 2 should also be deleted.

BUSINESS CHANGE QUESTION BANK

Errata and clarifications
Q48, Solution
The solution should state:
A purchase of own shares would be very inefficient in terms of tax since John has not owned the
shares for five years, the purchase would therefore be treated as an income distribution. The
receipt would be taxed at 30.56% and the tax liability would be (250,000 - 191,250) x 30.56% =
17,954.
Only the excess over the amount originally subscribed for the shares (ie the amount paid for the
shares by the original shareholder including any share premium attached to the shares) is taxable
as dividend income. As the original subscription price and the base cost of the shares is the same
no gain or loss arises on this disposal.

ICAEW 2014