Capital Maintenance – NBC Institute

FR – NOV 2016 – L2 – Q2c – Conceptual Framework for Financial Reporting

Question tests understanding of capital maintenance concepts and their practical application in profit measurement under different concepts.

Question

i. The conceptual framework states that there are two concepts of capital. Explain these two concepts. (4 Marks)

ii. Perfect World Limited commenced business on January 1, 2015 with a single item of inventory which costs N120,000. During the year it sold the item for N180,000 in cash. Also, during the year, general inflation was 10% but the inflation specific to the item was 12%. Calculate the profit under each concept of capital maintenance and show the effect on the Equity of the Company. (7 Marks)

Answer

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Tags: Capital Concepts, Capital Maintenance, Financial Capital, Physical Capital, Profit measurement
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: NOV 2016

FR – May 2018 – L2 – Q5b – Conceptual Framework for Financial Reporting

Explain the distinction between financial capital maintenance and physical capital maintenance.

Question

According to the IASB Conceptual Framework, the concept of capital maintenance is concerned with how an entity defines the capital it seeks to maintain. The concept of capital gives rise to financial capital maintenance and physical capital maintenance. The selection of the appropriate concept of capital by an entity should be based on the needs of the users of its financial statements.

Required:
Distinguish between financial capital maintenance and physical capital maintenance. (6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Maintenance, Conceptual Framework, Financial Capital, Physical Capital
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: MAY 2018

FR – NOV 2016 – L2 – Q2c – Conceptual Framework for Financial Reporting

Question tests understanding of capital maintenance concepts and their practical application in profit measurement under different concepts.

Question

i. The conceptual framework states that there are two concepts of capital. Explain these two concepts. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Concepts, Capital Maintenance, Financial Capital, Physical Capital, Profit measurement
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: NOV 2016

FR – May 2018 – L2 – Q5b – Conceptual Framework for Financial Reporting

Explain the distinction between financial capital maintenance and physical capital maintenance.

Question

Required:
Distinguish between financial capital maintenance and physical capital maintenance. (6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Maintenance, Conceptual Framework, Financial Capital, Physical Capital
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: MAY 2018

Question Tag: Capital Maintenance

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FR – NOV 2016 – L2 – Q2c – Conceptual Framework for Financial Reporting

Question tests understanding of capital maintenance concepts and their practical application in profit measurement under different concepts.

FR – May 2018 – L2 – Q5b – Conceptual Framework for Financial Reporting

Explain the distinction between financial capital maintenance and physical capital maintenance.

FR – NOV 2016 – L2 – Q2c – Conceptual Framework for Financial Reporting

Question tests understanding of capital maintenance concepts and their practical application in profit measurement under different concepts.

FR – May 2018 – L2 – Q5b – Conceptual Framework for Financial Reporting

Explain the distinction between financial capital maintenance and physical capital maintenance.

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Question Tag: Capital Maintenance

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FR – NOV 2016 – L2 – Q2c – Conceptual Framework for Financial Reporting

Question tests understanding of capital maintenance concepts and their practical application in profit measurement under different concepts.

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FR – May 2018 – L2 – Q5b – Conceptual Framework for Financial Reporting

Explain the distinction between financial capital maintenance and physical capital maintenance.

You're reporting an error for "FR – May 2018 – L2 – Q5b – Conceptual Framework for Financial Reporting"

FR – NOV 2016 – L2 – Q2c – Conceptual Framework for Financial Reporting

Question tests understanding of capital maintenance concepts and their practical application in profit measurement under different concepts.

You're reporting an error for "FR – NOV 2016 – L2 – Q2c – Conceptual Framework for Financial Reporting"

FR – May 2018 – L2 – Q5b – Conceptual Framework for Financial Reporting

Explain the distinction between financial capital maintenance and physical capital maintenance.

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