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F2 – Advanced Financial Reporting

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Showing 1–3 of 15 questions

Question 1

On 1 January 20X6 AB, a listed entity, had 10,000,000 $1 ordinary shares in issue. On 1 April 20X6 AB issued 3,000,000 $1 ordinary shares at their full market price. AB's profit was reported as $1,100,000 after charging corporate income tax of $500,000.

Place the correct values for profit and weighted average number of shares in the boxes below that will be used to calculate AB's earnings per share for the year to 31 December 20X6.

Answer is in the explanation below.

Question 2

EFG is preparing its financial statements to 31 March 20X8. During the year ended 31 March 20X7, EFG purchased a piece of land for $1 million which is used as the staff car park. EFG has a policy of revaluing land, in accordance with International Accounting Standards, and at 31 March 20X8, accounted for a substantial increase in its value.

Revenue and operating profit has remained constant over the 2 years.

When comparing EFG's financial statements for the year ended 31 March 20X7 with those of 20X8, which THREE of the following would be expected?

Select all that apply, then click Submit answer.

  • ○

    Increase in profit before tax.
  • ○

    Increase in other comprehensive income.
  • ○

    Increase in return on capital employed.
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    Decrease in return on capital employed.
  • ○

    Increase in net asset turnover.
  • ○

    Decrease in net asset turnover.
Question 3

Which THREE of the following statements are true in relation to financial assets designated as fair value through profit or loss under IAS 39 Financial Instruments: Recognition and Measurement?

Select all that apply, then click Submit answer.

  • ○

    Shares in another entity held for short term trading purposes fall within this category.
  • ○

    Transaction costs in relation to these assets are expensed to profit or loss on acquisition.
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    Transaction costs in relation to these assets are added to the initial cost of the asset on acquisition.
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    The gain or loss on the subsequent measurement of these assets is recorded within other comprehensive income.
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    The gain or loss on the subsequent measurement of these assets is recorded within profit for the year.
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    Once the asset has been subsequently measured to fair value an impairment review is undertaken.