Principal 50,000 Disposal proceeds

MLP 14,000 arrears

Effective int rate 12.4%
LT 5
Year Principal Int MLP Ending bal
1 50,000 6,200 (14,000) 42,200 L
2 42,200 5,233 (14,000) 33,433 NCL
B/S
Asset
Asset inder finance lease Dr Cash 50,000
Cost 50,000 Cr NBV 40,000
Acc depn (10,000) Cr Deferred income 10,000
NBV 40,000
Dr Deferred income 2,000
NCL Cr I/S 2,000
Lease liability 33,433
Deferred income 6,000 I/S
CL Depn (10,000)
Lease liability 8,767 Disposal profit 2,000
Deferred income 2,000 Finance cost (6,200)
Fryatt SoFP
SoCI Assets Equity
Rev 630,000 NCA Ord share
CoS (331,280) w6 Property 194,000 Share pre
Gross profit 298,720 Plant equipment 73,120 RE
Distr. Cost (19,800) Leased asset 60,000 NCL
Admin cost (15,600) CA Bank loan
Finance cost (14,000) AR 51,200 Finance lease
PBT 249,320 Inventory 19,600 CL
Tax (7,200) w4 Bank 4,300 AP
PAT 242,120 Total Asset 402,220 Finance lease
Income tax
Total E n L
w1 depn Property PE Leased asset Total
Dr CoS 6,000 18,280 12,000 36,280
Cr NCA 6,000 18,280 12,000 36,280
w2
Dr Lease liability 29,000
Cr CoS 29,000
w3 Lease
Principal 72,000
MLP 29,000
% 10%
Year Principal Int MLP Total
May 07 72,000 7,200 (29,000) 50,200
May 08 50,200 5,020 (29,000) 26,220
w4 Tax
Dr I/S 7,200
Cr Tax payable 7,200
w5 NCA
Property PE Leased asset
Cost -TB 240,000 140,000 72,000
Acc Depn - as per TB (40,000) (48,600)
Depn- w1 (6,000) (18,280) (12,000)
NBV 194,000 73,120 60,000

w6 CoS
As per TB 324,000
Remove lease pmt (29,000) w2
Depn 36,280 w1
Adjusted CoS 331,280
sample of WA
Time No shares WA Total Description
1.1.2016 100,000 1 100,000 OB
1.4.2016 80,000 0.75 60,000 New issue
1.7.2016 18,000 1 18,000 share div
1.8.2016 (20,000) 0.42 (8,333) share buyback
WA no of shares 169,667

Time No shares WA Total Description

1.1.20X1 120,000 1 120,000 OB
1.3.20x1 20,000 0.83 16,667 New issue
1.7.20x1 50,000 0.200 10,000 partially paid
1.11.20x1 (10,000) 0.17 (1,667) share buyback
WA no of shares 145,000
LE 2
Gross profit 200,000
Compensation cost (50,000)
PBT 150,000
Tax (40,000)
PAT 110,000
Less: Pref div 2,000
Net earning attributab 108,000
WA no of shares 100,000
EPS 1.08

LE3
Time No shares WA Total Description
1.1.20X2 8,000,000 1 8,000,000 OB
30.9.20x1 1,000,000 0.25 250,000 New issue
WA no of shares 8,250,000
Net earning attributable to ord. sh holder 3,300,000
EPS 20X2 0.40
EPS 20X1 0.41

comparative EPS = NI - Pref share div

Bonus/stock plit/stock div WA no of shares + bonus/stock split/stock div

Time No shares WA Total Description

1.1.20X2 400,000 1 400,000 OB
30.9.20x2 100,000 1.00 100,000 New issue
WA no of shares 500,000
Net earning attributable to ord. sh holder 80,000
EPS 20X2 0.16
EPS 20X1- comparative 0.15
NI-pref div 2015 100,000 paid up capital $ 100,000
2016 120,000 face value $ 0.50
Right fraction 5:1 mkt value 3
Exercise date 1.4.2016 exercise price 2

1. Theoretical ex right price

= 5*mkt value + 1* ex. Price 2.83
5+1
2. Adj factor
= mkt value / TERP 1.06
3. WA no of shares
= WA no of shares before the right * AF + WA no of shares after the right

= 200000*3/12*1.06+240000*9/12 233,000
212,000
212,014
4. Comparative and basic EPS
Basic EPS 2016 0.52
Comparative EPS 2015 0.47 = basic EPS 2015 / AF
LE 5
TERP 3.4
LE 6
1. Theoretical ex right price
= 5*mkt value + 1* ex. Price 1.50
5+1
2. Adj factor
= mkt value / TERP 1.07
3. WA no of shares
= WA no of shares before the right * AF + WA no of shares after the right

110,000

4. Comparative and basic EPS

Basic EPS 2016 0.45
Comparative EPS 2015 0.375 = basic EPS 2015 / AF

LE 7
1. Theoretical ex right price
= 5*mkt value + 1* ex. Price 10.00
5+1
2. Adj factor
= mkt value / TERP 1.10
3. WA no of shares
= WA no of shares before the right * AF + WA no of shares after the right

591,667

4. Comparative and basic EPS

Basic EPS 2017 2.54
basic EPS 2016 2.200 = basic EPS 2015 / AF
comparative EPS 2016 2.0
Basic EPS 2018 3.0
 25,000
7,000
257,620

20,000
26,220

35,200
23,980
7,200
402,220
IAS 17 Lease practice
Correction of errors
Dr Liabili ###
Cr RE ###
Recognise int exp
Dr RE 77,470
Cr Liabili 77,470
Recognise depn
Dr RE ###
Cr NCA ###
PAT - pref div ###
WA no of shar ###
Basic EPS 1.5
$000 % tax rateConvert A1 B1 A1/B1 Diluted EPSRanking
1. Bond ### 8% 40% $25:1 s 120 100 1.2 1.47 2
2. Loan ### 10% 40% $25:1 s 150 100 1.5 1.50 3
3. Pref share ### 10% 40% $2.5:1 250 100 2.5 4
4. contingently issuable - newly i -
No of Mtk valu Option A1 B1 A1/B1 Diluted EPS
5. Option 500 30 20 0 166.667 - 1.29 1

B1 = (Mkt value - Option ex. Price) * no of shares under option

Mkt value

Step 3: Cal diluted EPS

ReturnWA no ofEPS
Basic ### 1,000 1.5
Options 0 167 1.29 Diluted
Bond 120 100 1.28 Diluted
Loan 150 100 1.30 Diluted
Pref share 250 100 1.38 Diluted
LE 8
PAT - pref div ###
WA no of shar ###
Basic EPS 1.5

$000 % tax rate

per 1 shares A1 B1 A1/B1 Ranking
1. Loan ### 10% 28% 5 72 200 0.36 2
2. Loan ### 15% 28% 1 108 1,000 0.11 1

NI Wa no ofEPS
Basic ### 1,000 1.50
Loan 15% 108 1,000 0.80 Diluted
Loan 10% 72 200 0.76 Diluted
LE 9
PAT - pref div ###
WA no of shar 500
Basic EPS 2.4

No of Mtk valu Option A1 B1 Diluted EPS

Option 100 20 15 0 25 2.29 Diluted

LE 10
NI 150
Time No shaWA Total Description
1.1.20X1 ### 1 1,000 OB
1.8.20X1 120 0.4 50 Newly issue due to a new branch open
WA no of shares 1,050
NI 150
Basic EPS 0.143

A1 B1 a1/b1
a/ - 120 -
b/ - 100 -
Diluted EPS ###

Step 1: TERP
1.8
Step 2: AF 1.1

Step 3: WA no of shares

WA no of shar ###
NI ###
Basic EPS ###
TAX LE 1
Tax due on 20X8 prof 36,000
Underpmt 5,000
Total tax charge 41,000

Tax due on 20X8 prof 36,000

Overpayment (5,000)
Total tax charge 31,000

LE 4
Year 20x1 20x2 20x3 20x4 20x5
Cost- accounti ### 40,000 ### ### 10,000
Depn - accoun ### 10,000 ### ### 10,000
Cost - tax base ### 37,500 ### ### -
Depn - tax bas ### 12,500 ### ###
NBV - account ### 30,000 ### ### -
NBV - tax base ### 25,000 ### - -
Temporary dif ### 5,000 7,500 ### -
Deferred tax - ### 2,000 3,000 4,000 -

Taxable profit ### 25,000 ### ### 25,000

Add back acct ### 10,000 ### ### 10,000
Less tax depn ### ### ### ###
Taxable profit ### 22,500 ### ### 35,000
Curren tax ch ### 9,000 9,000 9,000 14,000
Deferred tax ### 1,000 1,000 1,000 (4,000)
Income tax ex ### 10,000 ### ### 10,000

B/S
NCL
Deferred tax li ### 2,000 3,000 4,000
CL
Current tax pa ### 9,000 9,000 9,000 14,000
MCQ
90
Income tax ex ###
Over provision ###
Deferred tax e 600
Total tax char ###

92
Acct base
Tax base
Taxable TD ###
Deferred tax li ###

Tax provision ###

Less Over prov ###
Less Deferred ###
Tax charge ###

93
Provision ### Deferred tax liabi7,000
Less Over prov ### less deferred tax 3,000
Add DT exp ### DT to I/S 4,000
Tax charge ###
LE 6 Cr
Income tax pr ### Tax payable
Under provisi ### Cash
Deferred tax li ### DT liability
Total tax char ###

LE 7 Cr
Provision 20X 360 Tax payaB/S
Tax on capital 18 Tax payaCL
Deferred tax 20 Deferred Tax payable 378
Under provisi 4 Cash NCL
Total tax char 402 Deferred tax 120

Weiser IAS 12
SoCI SoFP
Revenue ### NCA Equity and liability
CoS ### add depnLeased propert 22,500 Equity
Gross Profit ### PPE 12,000 Ord. share 30,000
Distr. Cost ### CA RE 15,700
Admin exp ### Inventory 27,400 RS 2,800
Finance cost 400 AR 16,500 NCL
PBT ### Total assets 78,400 Deferred tax 3,300 w5
Tax ### w2 CL
PAT ### AP 13,500
OCI Current tax 12,000 w3
Revaluation su ### w1 Bank 1,100
Deferred tax ### w4 Total E n L 78,400
###
Total CI for th ###

SOCE Ord. s RE RS Total

1.1.20X8 ### 4,150 - ###
Profit for the year 11,550 ###
OCI 2,800 2,800
Total ### 15,700 2,800 ###
w1 leased property w2 DepnCost Acc. DeDepn 20X8NBV w4 Deferred tax exp - OCI
Cost ### Leased p ### 1,500 ### Deferred tax 1,200
Acc. Depn ### PPE ### 7,250 3,000 ### w5 Deferred tax - SoFP
NBV ### w3 Income tax exCr b/f 1,350
Revalued amt ### Provisio ### Tax payable I/S 750
Revaluation g ### Under pr 500 OCI 1,200
Deferred 750 c/f 3,300
Tax charg ###
Amortised Financial liability

Issue zero coupon bond at par on the first day of accounting period for nominal value of 10,000
The bond is redeemable after 2 years at a premium of 1,449
Effective int rate 7% 7%
Year Princi Int Cash paEnding bal
A B C D
1 ### 700 - ###
2 ### 749 ### -

A Issue price less issuance cost/ disct

or PV of all Future CF
B = effective int rate * principal
C = coupon rate * nominal value
D = ending bal = redeemable amt

Issue $20,000 6% four year loan note on the first day of acct. year.
Loan note issued at a disct of 10% . Redeem after 3 year at premium of $1,015
Effective int 12% Issue co 1,000

Principal 17,000
Year Princi Int Cash paEnding bal
1 ### 2,040 ### ###
2 ### 2,141 ### ###
3 ### ### ### ###
4 ### ### ### (0)

Dr Cash ### Dr Loan liabil 1,000

Cr Loan liabi ### Cr Cash 1,000

Dr Int exp 2,040 Dr Loan liabil 1,200

Cr Loan liabi 2,040 Cr Cash 1,200
Compound instrument
Step 1: PV of instrument
Step 2: Future CF disct to PV
Step 3: Equity instrument = (1)-(2)

Year Disct. CF PV of CF
1 0.92 800 736
2 0.84 800 673
3 0.77 20,800 ###
Total ### liability component
Equity 2,575 bal figure
Instrume ###
Year PrincipInt Cash pa Ending bal
1 ### ### (800) ###
LE 3
Year Princi Int Cash paEnding bal
1 ### 100 (59) 1,041
2 ### 104 (59) 1,086
3 ### 109 (59) 1,136
4 ### 114 (59) 1,190
5 ### 119 ### 0

Year Princi Int Cash paEnding bal

1 ### 30,227 - ###

AFS FVTPL
1.1.20X1 Dr AFS 802 Dr FTPL 800
Cr Cash 802 Dr I/S 2
Cr Cash 802

31.12.20x1 Dr AFS 98 Dr FTPL 100

Cr OCI 98 Cr I/S 100

3.May.X2 Dr Cash 880 Dr Cash 880

Dr I/S 20 Dr I/S 20
Cr AFS 900 Cr FTPL 900
Dr OCI 98
Cr I/S 98