IAS 1 (REFER TO EXCEL)

IAS 16
IAS 16 & IAS 40 (dah learn tak discuss)

QUESTION 6 (SUMMER 2018 & 2016)

IAS 10

IAS 10 Events After the Reporting Period prescribes relevant treatment for events that occur after
an entity’s reporting period has ended.

a) Explain what is meant by the term “Events After the Reporting Period.” Your answer
must clearly distinguish between an “Adjusting event” and a Non Adjusting event and
provide one example in each case. (5 marks)

b) EARP Ltd is finalising its financial statements for year ended 31st December 2014 has
identified the following issues:

1. A smaller customer who owed EARP Ltd €45,000 as at 31st December 2014 was
declared bankrupt on 14th January 2015. (3 Marks)

2. On 3rd January 2015 a fire broke out in one of EARP’s warehouses destroying its
contents. The carrying value of the warehouse and its inventory was €8.5 million
and €4 million respectively. EARP Ltd has been notified that its insurance policy
will only cover €6.25 million of the damages. (4 Marks)

3. Inventory stored in another warehouse was valued at its original cost of €320,000
in the Statement of Financial Position on 31st December 2014. On 8th January
2015 this batch of stock was sold for €167,000. (3 Marks)

Required:

a) Explain the treatment of the ALL above items in the financial statements for the year
ended 31st December 2014. (Marks as indicated)
(Total 15 Marks)
IAS 33
IAS 37 (REFER PDF)
REPORT: INTERPRETATION OF FINANCIAL STATEMENTS
Mai – liquidity & efficiency
Atin – solvency & shareholders

Han – profitability & (b)

CASH FLOW

The following extracts are from the financial statements of HydaleryeCo. for the year ended 31
December 2020:

Income Statement for the year ended 31 December 2020

€m

Sales revenue 1,162

Cost of Sales (766)

Gross profit 396

Distribution costs (67)

Administrative expenses (120)

Profit from operations 209

Interest receivable 9

Interest payable (25)

Profit before tax 193

Income tax expense (24)

Profit after tax 169

Statement of Financial Position as at:

31 Dec 2020 31 Dec 2019

€m €m €m €m

Non-current assets

Property, plant and equipment 813 544

Intangible assets 70 35

Investments 9 8

892 587

Current Assets
Inventories 96 88

Trade receivables 160 173

Cash 250 124

506 385

Total Assets 1,398 972

Equity

Issued share capital (25 cent nominal value) 29 24

Share premium 112 77

Revaluation reserve 25 -

Retained earnings 405 326

571 427

Non-current liabilities

Loan 400 300

Current liabilities

Trade payables 144 111

Bank Overdraft 237 107

Taxation 46 27

427 245

Total equity and liabilities 1,398 972

Additional information:

(i) Profit from operations is after charging depreciation on the property, plant and equipment
of €25 million and amortisation on the intangible fixed assets of €5 million.
(ii) The revaluation reserve relates wholly to property, plant and equipment.
(iii) During the year ended 31 December 2020, plant and machinery costing €500 million, and
with accumulated depreciation of €424 million at date of disposal, was sold for €70 million.
(iv) During the year ended 31 December 2020, 20 million 25c shares were issued at a premium
of €1.75.
(v) Dividends paid during the year were €90 million
Required:

Prepare a Statement of Cash Flow for HydaleryeCo for the year ended 31 December 2020 in compliance
with IAS 7.

(Total 20 marks)

Refer to past year question and tutorial question: W1 to W4