Expense Recognition – NBC Institute

FR – Dec 2022 – L2 – Q5a – Intangible Assets Treatment for Employee Training

Analyze the treatment of employee training costs as an intangible asset under IAS 38.

Question

Damba Ltd spent GH¢400,000 on training courses for its employees, which has resulted in increased efficiency and cost savings. The Assistant Accountant has recognized the training costs as an intangible asset and charged six months’ amortization based on the average time within which the training courses were completed.

Required:
Comment on the Assistant Accountant’s treatment of the aforementioned transaction in Damba Ltd’s financial statements for the year ended March 31, 2022, and advise on how it should be handled under International Financial Reporting Standards.

Answer

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Tags: Amortization, Employee training, Expense Recognition, Intangible Assets
Level: Level 2

Topic: IAS 38: Intangible assets
Series: DEC 2022

FA – May 2022 – L1 – SA – Q7 – Accounting Concepts

Identify the accounting principle applied when treating small assets as expenses.

Question

Habib Limited decided to treat ten stapling machines it acquired for ₦15,000 as expenses in its books. What principle of accounting did Habib rely on in this treatment?

A. Aggregation
B. Materiality
C. Going concern
D. Offsetting
E. Substance over form

Answer

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Tags: Accounting principles, Expense Recognition, Materiality
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2022

CR – July 2023 – L3 – Q2B – IFRS 2: Share-Based Payments

Account for the share-based payment scheme under IFRS 2 and prepare relevant extracts for profit or loss and statement of financial position.

Question

On 1 April 2020, each of the seven (7) directors of Jantua Ltd received 16,000 share options as an award. Jantua Ltd prepares its accounts to 31 March each year. The condition attached to the award is that the directors must remain employed by Jantua Ltd for three years. The fair value of each option at the grant date was GH¢100 and the fair value of each option at 31 March 2022 was GH¢110. At 31 March 2021, it was estimated that two (2) directors would leave before the end of three years. Due to an economic upturn, the estimate of directors who were going to leave was revised to one (1) director at 31 March 2022. The expense for the year as regards the share options had not been included in profit or loss for the current year, and no director had left by 31 March 2022.

Required:
With reference to International Financial Reporting Standards, advise the directors on how to account for the above transactions of Jantua Ltd in its financial statements as at 31 March 2022.
(6 marks)

Answer

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Tags: Employee Benefits, Equity-Settled, Expense Recognition, Financial Statements, IFRS 2, Share-Based Payments
Level: Level 3

Topic: IFRS 2: Share-Based Payments
Series: JULY 2023

FR – Dec 2022 – L2 – Q5a – Intangible Assets Treatment for Employee Training

Analyze the treatment of employee training costs as an intangible asset under IAS 38.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Amortization, Employee training, Expense Recognition, Intangible Assets
Level: Level 2

Topic: IAS 38: Intangible assets
Series: DEC 2022

FA – May 2022 – L1 – SA – Q7 – Accounting Concepts

Identify the accounting principle applied when treating small assets as expenses.

Question

Habib Limited decided to treat ten stapling machines it acquired for ₦15,000 as expenses in its books. What principle of accounting did Habib rely on in this treatment?

A. Aggregation
B. Materiality
C. Going concern
D. Offsetting
E. Substance over form

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting principles, Expense Recognition, Materiality
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2022

CR – July 2023 – L3 – Q2B – IFRS 2: Share-Based Payments

Account for the share-based payment scheme under IFRS 2 and prepare relevant extracts for profit or loss and statement of financial position.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Employee Benefits, Equity-Settled, Expense Recognition, Financial Statements, IFRS 2, Share-Based Payments
Level: Level 3

Topic: IFRS 2: Share-Based Payments
Series: JULY 2023

Question Tag: Expense Recognition

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FR – Dec 2022 – L2 – Q5a – Intangible Assets Treatment for Employee Training

Analyze the treatment of employee training costs as an intangible asset under IAS 38.

FA – May 2022 – L1 – SA – Q7 – Accounting Concepts

Identify the accounting principle applied when treating small assets as expenses.

CR – July 2023 – L3 – Q2B – IFRS 2: Share-Based Payments

Account for the share-based payment scheme under IFRS 2 and prepare relevant extracts for profit or loss and statement of financial position.

FR – Dec 2022 – L2 – Q5a – Intangible Assets Treatment for Employee Training

Analyze the treatment of employee training costs as an intangible asset under IAS 38.

FA – May 2022 – L1 – SA – Q7 – Accounting Concepts

Identify the accounting principle applied when treating small assets as expenses.

CR – July 2023 – L3 – Q2B – IFRS 2: Share-Based Payments

Account for the share-based payment scheme under IFRS 2 and prepare relevant extracts for profit or loss and statement of financial position.

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Question Tag: Expense Recognition

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FR – Dec 2022 – L2 – Q5a – Intangible Assets Treatment for Employee Training

Analyze the treatment of employee training costs as an intangible asset under IAS 38.

You're reporting an error for "FR – Dec 2022 – L2 – Q5a – Intangible Assets Treatment for Employee Training"

FA – May 2022 – L1 – SA – Q7 – Accounting Concepts

Identify the accounting principle applied when treating small assets as expenses.

You're reporting an error for "FA – May 2022 – L1 – SA – Q7 – Accounting Concepts"

CR – July 2023 – L3 – Q2B – IFRS 2: Share-Based Payments

Account for the share-based payment scheme under IFRS 2 and prepare relevant extracts for profit or loss and statement of financial position.

You're reporting an error for "CR – July 2023 – L3 – Q2B – IFRS 2: Share-Based Payments"

FR – Dec 2022 – L2 – Q5a – Intangible Assets Treatment for Employee Training

Analyze the treatment of employee training costs as an intangible asset under IAS 38.

You're reporting an error for "FR – Dec 2022 – L2 – Q5a – Intangible Assets Treatment for Employee Training"

FA – May 2022 – L1 – SA – Q7 – Accounting Concepts

Identify the accounting principle applied when treating small assets as expenses.

You're reporting an error for "FA – May 2022 – L1 – SA – Q7 – Accounting Concepts"

CR – July 2023 – L3 – Q2B – IFRS 2: Share-Based Payments

Account for the share-based payment scheme under IFRS 2 and prepare relevant extracts for profit or loss and statement of financial position.

You're reporting an error for "CR – July 2023 – L3 – Q2B – IFRS 2: Share-Based Payments"

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