FAE 2011 Where to begin

FAE _Wex

Rickyroma wrote: »

Missing one.

Thanks for that Rickyroma,

upnorthchick

luco123 wrote: »

Hi guys,

Can ye clarify a few things for me on directors accounts?

If a directors loan/current account appears as a Debtor in the SOFP, is this illegal as per the companies acts because they cannot have an overdrawn directors account.

If they appear as a creditor, the 10% of net assets rule applies?

Im confused on this help!

Whats the 10% net assets rule?

If a director makes a loan to a company this its not illegal, but they can charge the company interest particularly if it isnt secured and long term.
Also could confirm with HMRC an acceptable rate of interest to pay therefore causing no arguments when tax relief given in CT return.
Even more complicated if its a close company!
if interest is accrued and not paid after 12 months from period end tax relief denied.
on payment the co have to pay 20% income tax on the interest over to hmrc and co is to account for any tax on a quarterly basis using a form CT61 and provide director with a certificate to show this.
If Director is over basic rate band ie higher rate tax payer - maybe charging interest to company prob a bad idea as he would have additional income tax to pay at self assessment time.

does this help? ?

if its a debtor on SOFP this they have to pay S419 tax at 25% if paid within 9 months and one day from year end then no S419 to pay but Benefit in kind rules apply.

I hope i havent confused u hope ive helped.

Wrecked007

where is all this relevant companys Acts stuff in the notes?

ManwitaPlan

SL10 wrote: »

Debtor- Loan to the director from company
As a debtor there are tax implications. You have to pay tax to revenue on the loan at the marginal rate. Then when the loan is repaid the tax is repaid from revenue.

I think it is the debtor loan that the 10% also applies to and the companies act requirements.

Creditor- Loan from director to company
I dont think a creditors loan has any effect other than the company owes it to the directors and it is not illegal

I could be wrong here so feel free to correct me guys!

This is something that has confused me too.

I always though that if the company lends the director money in excess of 10% it is illegal (will appear as a debtor in company accounts).

Director can loan the company as much as they want but there will be tax implications.

My understanding....shaky on this.


PS. In the audit book Im sure it says that any loan to directors in excess of 10% must be approved by shareholders.....is it therefore not illegal if shareholder approval is obtained.

Confused.

jamesgreenpark

urgent help needed Re Tax elective,

Does anyone have copies of the case studies that were uploaded before each class, i think there are 12 of them. The solutions are up with the rest of the course material, but the cases are not!!!! if so can you put them up here! thanks!

Also, has anyone printed the solutions to the cases called bosco parrot, buy low sell high and rolls ltd. i printed them out and they are coming out in a weird format with "Deleted" and a load of boxes in the column! any suggestions on how to fix this?

jamesgreenpark

jamesgreenpark wrote: »

urgent help needed Re Tax elective,

Does anyone have copies of the case studies that were uploaded before each class, i think there are 12 of them. The solutions are up with the rest of the course material, but the cases are not!!!! if so can you put them up here! thanks!

Also, has anyone printed the solutions to the cases called bosco parrot, buy low sell high and rolls ltd. i printed them out and they are coming out in a weird format with "Deleted" and a load of boxes in the column! any suggestions on how to fix this?

i found them, they're in the book, panic over!!

Lowrey

ManwitaPlan wrote: »

This is something that has confused me too.

I always though that if the company lends the director money in excess of 10% it is illegal (will appear as a debtor in company accounts).

Director can loan the company as much as they want but there will be tax implications.

My understanding....shaky on this.


PS. In the audit book Im sure it says that any loan to directors in excess of 10% must be approved by shareholders.....is it therefore not illegal if shareholder approval is obtained.

Confused.

You need to get prior approval from shareholders for substantial transactions involving directors (ie director buy or sell assets to co) OR for company acting as a guarantor for director (need statutory declaration from auditor saying director can and will pay own loan i.e. not likely to use the security)

s.31 CA 90 - loans are illegal unless 1. less than 10% net assets 2. normal course business 3. vouched directors expenses 4. loans to group co's. 5. security for director above (guarantor).

acahopeful

information relating to loans and transactions with directors can be found in the resource pack. "A guide to transactions involvoing Directors - part 2 and part 3"

flapps

Directors loans outstanding as debtor at year end are grossed up at standard rate, not marginal as suggested earlier.. Tax paid over to revenue..

Tax is refunded as loan is repaid.. If loan is written off, company lose tax paid to revenue, Director deemed to take distribution and uses tax paid by company as credit against income tax..

In the case of small co's, i think loan must be repaid within 6 months of yr end if greater than 10% of net assets. If not, report to dir of corp enforcement. (not sure bout this though)

Moorstown

Does anyone know where I could get a good example/notes on a STRATEGIC PLAN as this was asked last year in FAE and answered poorly, also would any know where to get the same for a BUSINESS PLAN. I would really like to be prepared in these areas. Much Appreciated.

Hanley

I'm fed up now.

Reckon it's a terrible idea to just go thru ALL the cases, pick out indicators and how to handle them and make a big massive index of em?

ahtfulal

There will be an awful lot of sh*t spoken next week that's all I can say!

Hanley

eoferrall

Moorstown wrote: »

Does anyone know where I could get a good example/notes on a STRATEGIC PLAN as this was asked last year in FAE and answered poorly, also would any know where to get the same for a BUSINESS PLAN. I would really like to be prepared in these areas. Much Appreciated.

your text book 'corporate strategy for irish companies' has it. check out p 305.

Vaioer

A few pages back there was a query for a APM index- haven't done one for the cases yet, but here is one for the questions in the book.

Apart from Foreign NPV, anyone got any ideas of any other computation calculations for APM?

Unrelated, anyone got a summary of debt v equity in terms in of + & - of both?

DaeryssaOne

Hanley wrote: »

I'm fed up now.

Reckon it's a terrible idea to just go thru ALL the cases, pick out indicators and how to handle them and make a big massive index of em?

Em please don't call it a terrible idea cos that's pretty much all I've been doing!

It's not like I'm gonna lift an answer straight out of a case study (chance would be a fine thing!) but I like the security of having a similar enough issue in front of me that I can get ideas from. Once you make it apply to the question you're being asked I don't see why it's such a bad thing!

Really feel this week like I'm just trying to make up the hours by sitting here and reading through stuff, don't have the patience to write out full answers & have stopped caring...just want them to be over!!!

Kingdomkerry

ahtfulal wrote: »

Any ideas on management accountant side of PM boys and girls? The main areas I can see are;

-Discuss current performance measurement system (weaknesses in system)
-Suggested improvements (KPI's/Balanced Scorecard)
-Given some information to draft a budget and compare to current figures.

ABC, risk and uncertainty, divisionalisation, target pricing, short term decisions, budgeting, variance analysis/standard costing, marginal and absorption costing etc

ahtfulal

Kingdomkerry wrote: »

ahtfulal wrote: »

Any ideas on management accountant side of PM boys and girls? The main areas I can see are;

-Discuss current performance measurement system (weaknesses in system)
-Suggested improvements (KPI's/Balanced Scorecard)
-Given some information to draft a budget and compare to current figures.

ABC, risk and uncertainty, divisionalisation, target pricing, short term decisions, budgeting, variance analysis/standard costing, marginal and absorption costing etc

Ah will ya go away will ya

okdune

Vaioer wrote: »

A few pages back there was a query for a APM index- haven't done one for the cases yet, but here is one for the questions in the book.

Apart from Foreign NPV, anyone got any ideas of any other computation calculations for APM?

Unrelated, anyone got a summary of debt v equity in terms in of + & - of both?

Other calc include hedging for FX and Interest rate risk - Swaps, Options and Futures etc..

acahopeful

Hi Everyone, what IAS/IFRS do you think are the most likely to be examinable? Bit of an outrageous question I know.

Colts

acahopeful wrote: »

Hi Everyone, what IAS/IFRS do you think are the most likely to be examinable? Bit of an outrageous question I know.

Very very broad! One that keeps coming up in the case studies though is IAS 18.

I'm hoping nothing too complicated from IAS32, 39 & 19 comes up!

flapps

Have a question on financial reporting if anyone can help..

If a company sells at asset for below market value what are the reporting requirements, if its to:

a. A Subsidiary
b. A director
c. A 'friend'/relative of a director
d. Another company who's director is a 'friend'/relative of a director

I know u use IAS 24 - related parties and disclose all details of the transaction.. But im guessing u can't recognise the loss on sale in the P&L?

So what happens to the fake loss?

e.g. Property worth 500K on market, sold to a,b or c above for 200K

Dr Bank 200
Cr Property 500
Dr ???? 300

Deemed distrib/salary of director, dividend to subsidiary?

Or is it just legally not allowed?

Cheers

RidiculousHair

upnorthchick wrote: »

I have had the same problem!! Raging at that, and i know the exact cases you are on about just cant remember their names.. lol

but yea throw everything down but also remember the case you working from!

ive resigned myself to the fact its gonna be luck on the day...

Same as, seriously pissed at the whole set up....you put in all this work, you could know everything, but on the day make a total f**k up of it....then that's not taking into account the total inconsistencies in the solutions to the cases....just think, this time next week.. the core will be done n dusted and we'll probably still be no better off!!

limklass2011

Hey all, Could someone plz explain to me the warranty provision workings for this case study. I understand the method just not why they used 114 as number of failures for 2011 - 2013 and 94 for the year 2014 (assuming its coming from 1% estimate of 2010 sales..just not sure on the reason for this..also the discount rate factors used do for the 8% do not equal the PV discount tables I have..appreciate any help on this..

RidiculousHair

upnorthchick wrote: »

Have you guys in north seen this? do they realise we finish our exams at half 5! lol

Ha, if i was up there, i'd be pretty pissed at that....think lot of us are going to be going for a snooze when this is done...though that place apartment does do some pretty nice grub anytime i've been up those parts

RidiculousHair

SL10 wrote: »

Debtor- Loan to the director from company
As a debtor there are tax implications. You have to pay tax to revenue on the loan at the marginal rate. Then when the loan is repaid the tax is repaid from revenue.

I think it is the debtor loan that the 10% also applies to and the companies act requirements.

Creditor- Loan from director to company
I dont think a creditors loan has any effect other than the company owes it to the directors and it is not illegal

I could be wrong here so feel free to correct me guys!

Yup, i'd agree with that, except to say that loan to director only has tax implications if the company is a close company, where the loan is grossed up at the standard rate, not the marginal rate. Also if the loan is interest free, potential BIK issues.

Re the loan from the director, don't forget the 13% limit on interest payments for tax, not sure bout the co law pt.

hope that helps

RidiculousHair

ahtfulal wrote: »

Any ideas on management accountant side of PM boys and girls? The main areas I can see are;

-Discuss current performance measurement system (weaknesses in system)
-Suggested improvements (KPI's/Balanced Scorecard)
-Given some information to draft a budget and compare to current figures.

Seems to be pretty much it from the cases, though from what mono was sayin in the lectures, some technical mgt accounting seems likely, which to be honest would screw me up big time....tryin to cover some of the main bits at a high level, just in case...possibly tp or standard costing if i was to guess...but again purely a guess

RidiculousHair

jamesgreenpark wrote: »

urgent help needed Re Tax elective,

Does anyone have copies of the case studies that were uploaded before each class, i think there are 12 of them. The solutions are up with the rest of the course material, but the cases are not!!!! if so can you put them up here! thanks!

Also, has anyone printed the solutions to the cases called bosco parrot, buy low sell high and rolls ltd. i printed them out and they are coming out in a weird format with "Deleted" and a load of boxes in the column! any suggestions on how to fix this?

Re the sols to bosco etc, think you need to turn off the "track changes" or "accept changes", if i remember right. On the 12 cases, i think there is a soft copy of them in one of those zip folders on the tax elective part of the website

mgsrocks

flapps wrote: »

Have a question on financial reporting if anyone can help..

If a company sells at asset for below market value what are the reporting requirements, if its to:

a. A Subsidiary
b. A director
c. A 'friend'/relative of a director
d. Another company who's director is a 'friend'/relative of a director

I know u use IAS 24 - related parties and disclose all details of the transaction.. But im guessing u can't recognise the loss on sale in the P&L?

So what happens to the fake loss?

e.g. Property worth 500K on market, sold to a,b or c above for 200K

Dr Bank 200
Cr Property 500
Dr ???? 300

Deemed distrib/salary of director, dividend to subsidiary?

Or is it just legally not allowed?

Cheers

There's a few things coming into play. For the accounting treatment (assuming the nbv is mv of €500k):
Dr Bank €200k
Dr Loss on Disposal (Income statement): €300
Cr: Property €500

Then there's tax. Company pays CGT @25% on the market value if sold to a related party or no cgt to a subsidiary (75% rule). The other party will pay CAT 300k (the gift part) and deduct CAT relief and gift exemption. If its a director or shareholder they don't pay CAT but its treated as a distribution so DWT for company at 20% and then taxed at marginal rate for individual.

Stamp duty @6% and no VAT if vat registered.

Finally the base cost of the shares will be reduced by €300k for future disposal of those shares.

I'm willing to be corrected on anything, just hope it would be enough to get competent!

RidiculousHair

jamesgreenpark wrote: »

i found them, they're in the book, panic over!!

Oops sorry, should really read the next post next time