FAE September 2012

katie21

SO i seemed to have got most of the indicators as mentioned above.
However I never mentioned IAS8 and that there is a prior year adjustment. WOuld this be a major downfall does anyone know?
I only got RC in the assessment so need to do good in PM this week.

galr

BESman wrote: »

This is pretty much word for word how I interpreted it.

Exact same but fecking forgot to say the patent thing and raging as that was fecking crucial! Rago! Please God did enough on the rest to pull through! Tax tmrw guys! And mgmt acc.........

Accrual Intentions

Apollo_Creed wrote: »

Guys,
Just a question on the Mgt Accounting.
Did anyone exclude the indirect costs and amortization and base the analysis on profitablity per user.
I then said that I would need more info on how indirect costs were allocated.
It came out then that the non web based was more profitable.

I think myself now that I probly did this wrong, so probly gonna have to hit PM hard tonight.

Anyways onwards and upwards, still fightin...

I'm with you there. Did more or less the same except I didn't do cost per user but said it was profitable and should still continue.

LR987654

katie21 wrote: »

SO i seemed to have got most of the indicators as mentioned above.
However I never mentioned IAS8 and that there is a prior year adjustment. WOuld this be a major downfall does anyone know?
I only got RC in the assessment so need to do good in PM this week.

I didn't mention IaS 8 as I figured we weren't auditing that company it as important, I just mentioned it needed to be corrected and dep. adjusted.

Ex 88

katie21 wrote: »

SO i seemed to have got most of the indicators as mentioned above.
However I never mentioned IAS8 and that there is a prior year adjustment. WOuld this be a major downfall does anyone know?
I only got RC in the assessment so need to do good in PM this week.

I have a feeling a lot of people missed ias 8 so that might help you! I mentioned it but I've heard of a lot who didn't so marking mightn't be too stringent

Porridge7

Ok - I think i completely messed up as I mentioned Tax- I stated that Ken owed 12A €1.2k million as he used 12As technology to develop the software and if he took a patent out in his own name on this development so he would need to pay 12A the funds back - As he used 12A to develop his own product - All of which was paid by 12A

Then I went down the route of stating that the acquisition cost would be excess if 12A didn't have the software rights - As what are we actually buying - Customers buy the Software and the Software doesnt belong to I2A.

I then proceeded to state maybe Ken could licence the rights to Link and maybe become our employee in a marketing role !!!

All of which would increase Links share of the marketplace and eliminate competition !!

lar05

no I wouldnt think you'd have to say anything about the thresholds, the exemption is lost once their is a parent - subsidiary holding, i only knew this from doing in work a lot aswel.

For the planned restructuring costs on acquisition, did anyone provide for the redundancy and break lease clauses on acquisition under IFRS3? and say Rob was correct in believing that it was not possible to capitalise costs up front?

katie21

Ye I said about providing for the redundancy payments and threw down the journal entry for it. didnt really write much about the break clause.

supernova84

They're really going heavy on IT, some load of balls for an accounting exam and there's nothing more boring.

I reckon 2 tax indicators 2moro (hardly have 3 in 3 cases)

1 IT

1 Corporate Governane (UK Code)

1 Ethics (ethical dilemma or some big ethical issue)

1 audit (risks or procedures)

2 Finance

2/3 PM (1 Mgt, 1 FR maybe)

Time management will be critical tomorrow.

On another note I've never known time to pass so quickly than when sitting these exams.

funkymonkey9

Should the redundancy payments not be accounted for under Ias 37 once the restructuring criteria are met?the restructuring likely wouldn't have a formal plan or anything as acquisition was not set in stone?also under Ifrs 3 does it not say to account for that separately and not capitalise in acquisition cost?could be wrong,I pulled the answer from one of Derry cotter cases

lala1987

Porridge7 wrote: »

Ok - I think i completely messed up as I mentioned Tax- I stated that Ken owed 12A €1.2k million as he used 12As technology to develop the software and if he took a patent out in his own name on this development so he would need to pay 12A the funds back - As he used 12A to develop his own product - All of which was paid by 12A

Then I went down the route of stating that the acquisition cost would be excess if 12A didn't have the software rights - As what are we actually buying - Customers buy the Software and the Software doesnt belong to I2A.

I then proceeded to state maybe Ken could licence the rights to Link and maybe become our employee in a marketing role !!!

All of which would increase Links share of the marketplace and eliminate competition !![/QUOTE

i also did this porridge and expensed the development expenditure as the company did not have an identifiable asset - appears to be incorrect based on everyone elses view.

BESman

funkymonkey9 wrote: »

Should the redundancy payments not be accounted for under Ias 37 once the restructuring criteria are met?the restructuring likely wouldn't have a formal plan or anything as acquisition was not set in stone?also under Ifrs 3 does it not say to account for that separately and not capitalise in acquisition cost?could be wrong,I pulled the answer from one of Derry cotter cases

That's what I said.

What exactly can be capitalised under IFRS 3? Costs in issuing debt and equity instruments? Didn't apply here.

lar05

BESman wrote: »

That's what I said.

What exactly can be capitalised under IFRS 3? Costs in issuing debt and equity instruments? Didn't apply here.

well i brought it in buy saying if the acquisition was to go ahead a formal plan would then be in place and those costs of restructuring should be regarded as a liability assumed at the acquisition date which would be correct i think but i suppose that plan would have to be in the 2012 period or else no provision is required in this year. ah i think im just confusing myself now. im problem wrong with it anyway

Szewinska

seeing as tax is the name of the game tonight I hope somebody can clarify this for me please

EIIS/BES/Seed Capital. I know EIIS introduced in FA 2011 but does this over ride BES and Seed Capital or are all three in operation.

I am unsure as to what to look at.

Cheers folks

FAE2012

lala1987 wrote: »

Porridge7 wrote: »

Ok - I think i completely messed up as I mentioned Tax- I stated that Ken owed 12A €1.2k million as he used 12As technology to develop the software and if he took a patent out in his own name on this development so he would need to pay 12A the funds back - As he used 12A to develop his own product - All of which was paid by 12A

Then I went down the route of stating that the acquisition cost would be excess if 12A didn't have the software rights - As what are we actually buying - Customers buy the Software and the Software doesnt belong to I2A.

I then proceeded to state maybe Ken could licence the rights to Link and maybe become our employee in a marketing role !!!

All of which would increase Links share of the marketplace and eliminate competition !![/QUOTE

i also did this porridge and expensed the development expenditure as the company did not have an identifiable asset - appears to be incorrect based on everyone elses view.

I did the same thing, went through the treatment of the intangible being incorrect originally as it had included research costs previously expensed and research costs can't be capitalised, then I showed a journal entry to adjust the it.

I then, however, went into how in order for a company to recognise an intangible under IAS 38 there are 3 conditions, one of which is they must have control over the intangible, and as they do not have control over it, Ken does, it should not be recognised in their accounts as it doesn't meet one of the criteria.

Hopefully I will get some credit for it. Got HC in the AAFRP so hoping this will make up for it.

Username2011

Just noticed that the valuation indicator wanted specific factors that could influence a final bid price. What did people have for this

katie21

I mentioned the need for a professional valuation (ken has valued it already - not professional) also asked how they had reached the future projections of 20% increase in revenue and to have a further look at these.
Also mentioned the 5% bad debts and make sure there are no more bad debts that we are un aware of.

Hopefully this was enough

wheatser

katie21 wrote: »

I mentioned the need for a professional valuation (ken has valued it already - not professional) also asked how they had reached the future projections of 20% increase in revenue and to have a further look at these.
Also mentioned the 5% bad debts and make sure there are no more bad debts that we are un aware of.

Hopefully this was enough

Did anyone notice that I2Us operating expenses increased from 20 to 480? What was that about?

LR987654

wheatser wrote: »

Did anyone notice that I2Us operating expenses increased from 20 to 480? What was that about?

yeah mentioned the need for a further explanation, open the books before agreeing to valuation. Also mentioned the issues with the patent being registered outside of the company so may not qualify. Just not sure ow about any of the exam.

Dee29

wheatser wrote: »

Did anyone notice that I2Us operating expenses increased from 20 to 480? What was that about?

It was the restatement of the research costs from the IS to Intangible in 2010, reducing op exp by 450.

Szewinska

the accounts were unaudited so i said be wary of reliance on this bearing in mind the incorrect treatment of the intangible assets and any hidden tax liabilities.

Dee29

Szewinska wrote: »

seeing as tax is the name of the game tonight I hope somebody can clarify this for me please

EIIS/BES/Seed Capital. I know EIIS introduced in FA 2011 but does this over ride BES and Seed Capital or are all three in operation.

I am unsure as to what to look at.

Cheers folks

EIIS was enacted in November 2011 and as far as I am aware BES existed until the end 2011. If the case states it is now XXX 2012... I would use EIIS otherwise BES

Seed Capital is designed for individuals who intend to start up their own business.

For BES/EIIS if the share/loan capital exceed 500k and the individual investing owns more than 30%, can't claim BES/EIIS relief.

06431755l

Any one go down the path of due diligence as a major factor prior to deciding on price?

wheatser

06431755l wrote: »

Any one go down the path of due diligence as a major factor prior to deciding on price?

I mentioned it but didnt go into too much details as time wasnt there to do so.

Szewinska

Dee29 wrote: »

EIIS was enacted in November 2011 and as far as I am aware BES existed until the end 2011. If the case states it is now XXX 2012... I would use EIIS otherwise BES

Seed Capital is designed for individuals who intend to start up their own business.

For BES/EIIS if the share/loan capital exceed 500k and the individual investing owns more than 30%, can't claim BES/EIIS relief.

Thanks Dee29, i see the distinction now between seed capital and bes/eiis. Eiis/bes is for existing companies getting investment.

if im setting up my own company from scratch then seed capital relief. does this apply to investor investing in a new company or just the owner himself?

FAE2012

lala1987 wrote: »

FAE2012 wrote: »

were we wrong so to do that???

To be honest I don't know. And I amn't thinking about it too much. I just thought it was the right way to go, especially since they included the information, I thought they wouldn't include it for no reason. Look we will find out on 23rd of November

haribo12

So what indicators did people have today ?

Dee29

Szewinska wrote: »

Thanks Dee29, i see the distinction now between seed capital and bes/eiis. Eiis/bes is for existing companies getting investment.

if im setting up my own company from scratch then seed capital relief. does this apply to investor investing in a new company or just the owner himself?

Think they have to work in the new co so wouldn't apply to an investor . P 48 of the tax book covers it well.

Chalk_Farm

Not sure if anybody has already mentioned this but WTF was with the way the paper was organised....shower of blind folded chimpanzees could have done a better job!!

Complaint shall be sent to the Institute about that!!

Szewinska

Dee29 wrote: »

Think they have to work in the new co so wouldn't apply to an investor . P 48 of the tax book covers it well.

great stuff. shall mark it down. i was reading the extra notes but i couldn't get a clear understanding. best of luck.