Financial Disclosure – NBC Institute

CR – May 2024 – L3 – SC – Q5a – Interim Financial Reporting (IAS 34)

Discuss the IAS 34 recommendations on interim reporting conditions and required disclosures.

Question

IAS 34 – Interim Financial Reporting does not make preparation of interim financial report mandatory, viewing it as a matter for government, security regulators, stock exchanges, or professional accountancy bodies within each country. However, the IASB strongly recommends that interim financial reporting be a requirement for companies whose equity or debt securities are publicly traded.

Required:

(i) Discuss the conditions under which IAS 34 encourages publicly traded entities to publish their interim reports. (3 Marks)

(ii) Identify and explain the notes that should be included in the interim report of traded entities in accordance with IAS 34. (5 Marks)

Answer

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Tags: : Interim Reporting, Financial Disclosure, IAS 34 Compliance, Interim Reports, Publicly Traded Entities, Regulatory Reporting
Level: Level 3

Topic: Interim Financial Reporting (IAS 34)
Series: MAY 2024

AAA – Nov 2017 – L3 – Q5 – Audit Evidence

Evaluate XYZ Bank’s provision for litigation, discuss audit procedures per ISA 501, and prepare litigation disclosure for financial statements.

Question

You are the audit manager for XYZ Bank Limited for the year ended December 31, 2016. The Bank’s Board noted a litigation issue involving a lawsuit from BBB Limited, where the Bank was found liable for a cheque conversion worth ₦2.1 billion. The high court imposed a penalty on the Bank for this amount, which BBB Limited is now claiming.

The Bank has objected to the judgment, appealing to the Court of Appeal, with legal counsel advising that a favorable outcome is expected. The Bank’s litigation-related financial information is as follows:

Provision for litigation (recognized in financial statements): ₦96 million
Litigation cases as defendant: 50
Litigation cases as plaintiff: 10
Claims in favor of the Bank: ₦2.7 billion
Claims against the Bank (including the ₦2.1 billion case): ₦3.2 billion

Requirements:
a. Discuss FOUR specific considerations under ISA 501 for obtaining audit evidence on litigation provisions.

(5 Marks)
b. Evaluate the adequacy of the litigation provision recognized in the financial statements as at December 31, 2016.

(5 Marks)
c. Prepare a summary disclosure of the litigation status for inclusion in the financial statement notes as at December 31, 2016.

(5 Marks)

Answer

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Tags: Audit evidence, Financial Disclosure, IAS 37, Litigation, Provisions
Level: Level 3

Topic: Audit evidence
Series: NOV 2017

FR – Nov 2020 – L2 – Q3b – Events After the Reporting Period (IAS 10)

Advise on accounting treatment for events after the reporting date in a company case study.

Question

(b) The following events took place in Chakachaka Company Nig. Limited:

(i) Shortly after the financial year ended on June 30, 2018, but before the financial statements were authorized for issue, Chakachaka Nigeria Limited’s inventory was destroyed by a fire outbreak which resulted in a loss of N200 million.

(ii) The company’s financial year that ended June 30, 2018, shows an amount of N60 million due from one of its debtors, Mr. Onigbese. Chakachaka Nigeria Limited provided for impairment at June 30, 2018, of N15 million against the gross value of N60 million. On July 31, 2018, before the financial statements were authorized for issue, Mr. Onigbese was declared bankrupt and unable to pay the debt.

(iii) Chakachaka Nigeria Limited was sued on June 30, 2018, but the judgment was only handed down on July 21, 2018. The Company was found liable for damages and costs amounting to N31 million. On July 22, 2018, Chakachaka Nigeria Limited filed a claim with its insurers, and on July 29, 2018, it was notified that the insurer would only cover N26 million of the loss.

Required:
Prepare a brief memorandum advising the directors of Chakachaka Nigeria Limited on the accounting treatment and/or disclosure required as a result of the events in (i) to (iii) after the reporting date.

Answer

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Tags: Adjusting Events, Financial Disclosure, IAS 10, Non-adjusting Events
Level: Level 2

Topic: Events After the Reporting Period (IAS 10)
Series: NOV 2020

CR – May 2024 – L3 – SC – Q5a – Interim Financial Reporting (IAS 34)

Discuss the IAS 34 recommendations on interim reporting conditions and required disclosures.

Question

Required:

(i) Discuss the conditions under which IAS 34 encourages publicly traded entities to publish their interim reports. (3 Marks)

(ii) Identify and explain the notes that should be included in the interim report of traded entities in accordance with IAS 34. (5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: : Interim Reporting, Financial Disclosure, IAS 34 Compliance, Interim Reports, Publicly Traded Entities, Regulatory Reporting
Level: Level 3

Topic: Interim Financial Reporting (IAS 34)
Series: MAY 2024

AAA – Nov 2017 – L3 – Q5 – Audit Evidence

Evaluate XYZ Bank’s provision for litigation, discuss audit procedures per ISA 501, and prepare litigation disclosure for financial statements.

Question

Provision for litigation (recognized in financial statements): ₦96 million
Litigation cases as defendant: 50
Litigation cases as plaintiff: 10
Claims in favor of the Bank: ₦2.7 billion
Claims against the Bank (including the ₦2.1 billion case): ₦3.2 billion

Requirements:
a. Discuss FOUR specific considerations under ISA 501 for obtaining audit evidence on litigation provisions.

(5 Marks)
b. Evaluate the adequacy of the litigation provision recognized in the financial statements as at December 31, 2016.

(5 Marks)
c. Prepare a summary disclosure of the litigation status for inclusion in the financial statement notes as at December 31, 2016.

(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Financial Disclosure, IAS 37, Litigation, Provisions
Level: Level 3

Topic: Audit evidence
Series: NOV 2017

FR – Nov 2020 – L2 – Q3b – Events After the Reporting Period (IAS 10)

Advise on accounting treatment for events after the reporting date in a company case study.

Question

(b) The following events took place in Chakachaka Company Nig. Limited:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjusting Events, Financial Disclosure, IAS 10, Non-adjusting Events
Level: Level 2

Topic: Events After the Reporting Period (IAS 10)
Series: NOV 2020

Question Tag: Financial Disclosure

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CR – May 2024 – L3 – SC – Q5a – Interim Financial Reporting (IAS 34)

Discuss the IAS 34 recommendations on interim reporting conditions and required disclosures.

AAA – Nov 2017 – L3 – Q5 – Audit Evidence

Evaluate XYZ Bank’s provision for litigation, discuss audit procedures per ISA 501, and prepare litigation disclosure for financial statements.

FR – Nov 2020 – L2 – Q3b – Events After the Reporting Period (IAS 10)

Advise on accounting treatment for events after the reporting date in a company case study.

CR – May 2024 – L3 – SC – Q5a – Interim Financial Reporting (IAS 34)

Discuss the IAS 34 recommendations on interim reporting conditions and required disclosures.

AAA – Nov 2017 – L3 – Q5 – Audit Evidence

Evaluate XYZ Bank’s provision for litigation, discuss audit procedures per ISA 501, and prepare litigation disclosure for financial statements.

FR – Nov 2020 – L2 – Q3b – Events After the Reporting Period (IAS 10)

Advise on accounting treatment for events after the reporting date in a company case study.

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CR – May 2024 – L3 – SC – Q5a – Interim Financial Reporting (IAS 34)

Discuss the IAS 34 recommendations on interim reporting conditions and required disclosures.

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AAA – Nov 2017 – L3 – Q5 – Audit Evidence

Evaluate XYZ Bank’s provision for litigation, discuss audit procedures per ISA 501, and prepare litigation disclosure for financial statements.

You're reporting an error for "AAA – Nov 2017 – L3 – Q5 – Audit Evidence"

FR – Nov 2020 – L2 – Q3b – Events After the Reporting Period (IAS 10)

Advise on accounting treatment for events after the reporting date in a company case study.

You're reporting an error for "FR – Nov 2020 – L2 – Q3b – Events After the Reporting Period (IAS 10)"

CR – May 2024 – L3 – SC – Q5a – Interim Financial Reporting (IAS 34)

Discuss the IAS 34 recommendations on interim reporting conditions and required disclosures.

You're reporting an error for "CR – May 2024 – L3 – SC – Q5a – Interim Financial Reporting (IAS 34)"

AAA – Nov 2017 – L3 – Q5 – Audit Evidence

Evaluate XYZ Bank’s provision for litigation, discuss audit procedures per ISA 501, and prepare litigation disclosure for financial statements.

You're reporting an error for "AAA – Nov 2017 – L3 – Q5 – Audit Evidence"

FR – Nov 2020 – L2 – Q3b – Events After the Reporting Period (IAS 10)

Advise on accounting treatment for events after the reporting date in a company case study.

You're reporting an error for "FR – Nov 2020 – L2 – Q3b – Events After the Reporting Period (IAS 10)"

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