Subject: FINANCIAL REPORTING

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 10 Marks

FR – Nov 2023 – L2 – Q7b – Presentation of Financial Statements (IAS 1)

Lists minimum line items for the statement of financial position and changes in equity as per IAS 1

IAS 1- Presentation of Financial Statements provides a list of line items that, as a minimum, must be shown on the face of the statement of financial position.

Required:

i. Give FIVE examples of minimum line items to be shown on the face of the statement of financial position. (5 Marks)
ii. State FIVE items that should be accounted for in the statement of changes in equity. (5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q7b – Presentation of Financial Statements (IAS 1)"

  • 5 Marks

FR – Nov 2023 – L2 – Q7a – Regulatory Framework for Financial Reporting

Discusses main sources of financial reporting regulations and reasons for regulatory practices.

Within the context of financial reporting and regulatory frameworks:

i. Discuss the main sources of regulations. (3 Marks)
ii. Discuss TWO reasons why financial reporting practice should be regulated. (2 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q7a – Regulatory Framework for Financial Reporting"

  • 5 Marks

FR – Nov 2023 – L2 – Q6c – Conceptual Framework for Financial Reporting

Discusses areas of financial reporting enhanced by technology, such as data collection, recording, and report distribution.

Discuss TWO areas of financial reporting that could be enhanced by the use of technology. (4 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q6c – Conceptual Framework for Financial Reporting"

  • 3 Marks

FR – Nov 2023 – L2 – Q6b – Ethical Issues in Financial Reporting

List three types of non-financial information useful to stakeholders for decision-making.

Businesses are increasingly accepting that they are not only accountable to investors and lenders, but also accountable to a much wider group of people or stakeholders to which non-financial information is useful in understanding and taking informed decisions on financial statements of the entities.

Required:
State THREE of such useful non-financial information. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q6b – Ethical Issues in Financial Reporting"

  • 8 Marks

FR – Nov 2023 – L2 – Q6a – Ethical Issues in Financial Reporting

Identify and discuss techniques for manipulating financial statements under ethical compliance.

The management of an entity experiencing a decline in profits or poor cash flows may use various forms of creative accounting techniques to manipulate the views shown by the financial statements while complying with all applicable accounting standards and regulations.

Required:
Identify and discuss FOUR techniques of creative accounting. (8 Marks)

 

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q6a – Ethical Issues in Financial Reporting"

  • 12 Marks

FR – Nov 2023 – L2 – Q5b – Accounting for Income Taxes (IAS 12)

Calculate Shakara Limited's income tax liability, deferred tax balance, and movement of deferred tax.

Shakara Limited was incorporated on January 1, 2022. During the year ended December 31, 2022, the company made a profit before taxation of N18,150,000.

The following capital expenditure were made during the year:

Expenditure N’000
Plant and machinery 7,200
Motor vehicles 1,800

The depreciation charged for the year amounted to N1,650,000, and capital allowance granted by the Federal Inland Revenue Services (FIRS) for the same period amounted to N2,250,000.

Company income tax rate is 30%, and deferred tax liability brought forward was N1,200,000.

Required:
i. Calculate the company income tax liability for the year ended December 31, 2022. (3 Marks)

ii. Calculate the deferred tax balance that should be disclosed in the statement of financial position of Shakara Limited as at December 31, 2022. (3 Marks)

iii. Prepare notes showing the movement of deferred tax charged to profit or loss for the year ended December 31, 2022. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q5b – Accounting for Income Taxes (IAS 12)"

  • 3 Marks

FR – Nov 2023 – L2 – Q5a – Accounting for Income Taxes (IAS 12)

Define deferred tax, permanent differences, and temporary differences per IAS 12.

Explain the following terms in accordance with IAS 12 – Income tax.
i. Deferred tax
ii. Permanent differences
iii. Temporary differences

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q5a – Accounting for Income Taxes (IAS 12)"

  • 20 Marks

FR – Nov 2023 – L2 – Q4a & b – Earnings Per Share (IAS 33)

Discuss diluted EPS and calculate EPS measures for Ebonyi Limited.

IAS 33 requires publicly-traded companies to calculate a diluted Earning Per Share (EPS) in addition to their basic EPS for the current year (with a comparative diluted EPS for the previous year), allowing for the effect of all dilutive potential ordinary shares.

Required: a. Explain the purpose of the dilutive measures and discuss THREE types of dilution. (8 Marks)

b. The statement of financial position (extracts) for Ebonyi Limited for the year ended December 31, 2022 is as follows:

Equity and Liabilities N’000
Ordinary shares (N1 each) 12,000
Retained earnings 36,000
Equity 48,000
Non-current liabilities:
5% convertible loan notes 4,000

Additional information: i. As at December 31, 2022, there has been no new issue of shares or loan notes for several years.
ii. The loan notes are convertible into ordinary shares in year 2023 or year 2024 at the following rates.
iii. At 30 shares for every N100 of loan notes if converted at December 31, 2023.
iv. At 25 shares for every N100 of loan notes if converted at December 31, 2024.
v. Company income tax rate is 30% on profit.

Required: Calculate the basic EPS and diluted EPS for year 2022. (8 Marks)

c. IAS 33 allows an entity to disclose an alternative measure of EPS in addition to the EPS calculated.

Required: Identify and explain TWO conditions that are required in accordance with IAS 33 to be complied with where an alternative measure of EPS is shown in the financial statements of an entity. (4 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q4a & b – Earnings Per Share (IAS 33)"

  • 12 Marks

FR – Nov 2023 – L2 – Q3b – Property, Plant, and Equipment (IAS 16)

Discuss financial implications of reclassifying investment property under cost and fair value models.

Young Shall Grow Limited with year-end December 31 purchased an office building, with a useful life of 50 years, for N55 million on January 1, 2013. The amount attributable to land was negligible. The company used the building as its head office until December 31, 2017, when the entity moved to a larger premises.

The building was reclassified as an investment property and leased out under a five-year lease. However, owing to a change in circumstances, Young Shall Grow Limited took possession of the building five years later, on December 31, 2022, to use it as its head office once more. At that date, the remaining useful life of the building was confirmed as 40 years.

The fair value of the building was as follows:

  • At December 31, 2017: N60 million
  • At December 31, 2022: N75 million

Required:

Discuss how the changes of use should be reflected in the financial statements of Young Shall Grow Limited:

  1. If the company uses the cost model for its investment properties.
  2. If the company uses the fair value model for its investment properties.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q3b – Property, Plant, and Equipment (IAS 16)"

  • 8 Marks

FR – Nov 2023 – L2 – Q3a – Property, Plant, and Equipment (IAS 16)

Explain reclassification criteria for transferring investment property to PPE.

a. If a property is transferred into or out of the category of property, plant and equipment (PPE), it might be reclassified as investment property or as no longer an investment property.

A transfer of investment property can only be made where there is a change of use of such property.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q3a – Property, Plant, and Equipment (IAS 16)"

  • 30 Marks

FR – Nov 2015 – L2 – Q1 – Consolidated Financial Statements (IFRS 10)

Prepare consolidated financial statements for Hapu Plc and Sege Plc for the year ended December 31, 2014.

Statement of financial position as at December 31, 2014

Hapu Plc (₦’000) Sege Plc (₦’000)
Assets
Non-current assets:
Property, plant, and equipment 32,000 25,000
Investments 33,500 –
Total non-current assets 65,500 25,000
Current assets
Cash at bank and in hand 9,500 2,000
Trade receivables 20,000 8,000
Inventory 30,000 18,000
Total current assets 125,000 53,000
Equity and liabilities
Share capital 40,000 10,000
Share premium 6,500 –
Retained earnings 55,000 37,000
Total equity 101,500 47,000
Current liabilities 23,500 6,000
Total equity and liabilities 125,000 53,000

Statement of profit or loss for the year ended December 31, 2014

Hapu Plc (₦’000) Sege Plc (₦’000)
Revenue 125,000 117,000
Cost of sales (65,000) (64,000)
Gross profit 60,000 53,000
Distribution costs (21,000) (14,000)
Administrative expenses (14,000) (8,000)
Profit before taxation 25,000 31,000
Income tax expense (10,000) (9,000)
Profit for the year 15,000 22,000

Statement of changes in equity (extract) for the year ended December 31, 2014

Hapu Plc (₦’000) Sege Plc (₦’000)
Retained earnings brought forward 40,000 15,000
Retained profit for the year 15,000 22,000
Retained earnings carried forward 55,000 37,000

Additional Information:

  1. Hapu Plc owns 80% of Sege’s shares, purchased in 2011 for ₦20.5 million when Sege’s retained earnings stood at ₦7 million.
  2. Included in Sege’s inventory as of December 31, 2014, were goods purchased from Hapu for ₦3.9 million, with a 30% profit margin on cost. Total sales from Hapu to Sege amounted to ₦6 million.
  3. Hapu Plc and Sege Plc proposed dividends of ₦2 million and ₦2.5 million respectively, not yet accounted for.
  4. Goodwill impairment tests indicate no impairment in accordance with IFRS 3 and IAS 36.

Required:
Prepare the consolidated statement of profit or loss and the consolidated statement of financial position for Hapu Plc and Sege Plc as at December 31, 2014.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2015 – L2 – Q1 – Consolidated Financial Statements (IFRS 10)"

  • 15 Marks

FR – May 2022 – L2 – SB – Q7 – Consolidated Financial Statements (IFRS 10)

Evaluate the acquisition of Warri Health PLC by computing financial ratios and drafting a technical report to the Chief Accountant of Owerri PLC.

The Board of Directors of Owerri PLC is planning to acquire a controlling interest in Warri Health PLC, a vaccine-producing company, to expand the profitability of the group. Both companies are quoted on the Nigerian Stock Exchange (NSE). The Chief Accountant of Owerri PLC has been given the industrial average and the financial statements of Owerri PLC and Warri Health PLC for the year ended December 31, 2020. This was done to enable the Chief Accountant compute the relevant ratios and evaluate the inherent potentials of the acquisition.

The following comparative ratios of Warri Health PLC and Owerri PLC with the industrial average are provided:

You are required to:
a. Compute the cost of sales ratio and earnings yield (EY) for both companies for the year ended December 31, 2020. (2 Marks)

b. Draft a technical report to the Chief Accountant of Owerri PLC, evaluating and advising on the desirability of acquiring a controlling interest in Warri Health PLC. (13 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2022 – L2 – SB – Q7 – Consolidated Financial Statements (IFRS 10)"

  • 15 Marks

FR – May 2022 – L2 – SB – Q6 – Conceptual Framework for Financial Reporting

Discuss the qualitative characteristics that make financial information useful and explain the capital maintenance concepts under the IASB framework.

a. The IASB Conceptual Framework for Financial Reporting gives much detail about the qualitative characteristics of financial information that make it useful.

Required:
Discuss the qualitative characteristics that make information useful to users of financial statements. (10 Marks)

b. The Financial Reporting Council of Nigeria (FRCN) is a Federal Government parastatal under the supervision of the Federal Ministry of Industry, Trade, and Investment.

Required:
Identify FOUR main objectives of FRCN as defined in the Act establishing the Institution. (2 Marks)

c. The IASB Conceptual Framework states that there are two concepts of capital maintenance.

Required:
Explain the term financial capital maintenance and physical capital maintenance concepts. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2022 – L2 – SB – Q6 – Conceptual Framework for Financial Reporting"

  • 15 Marks

FR – May 2022 – L2 – SB – Q5 – Revenue from Contracts with Customers (IFRS 15)

Compare contract liabilities and assets, stand-alone selling price vs. transaction price, and assess contract modification criteria.

IFRS 15 – Revenue from Contracts with Customers defines a contract as an agreement between two or more parties that creates enforceable rights and obligations.

Required:
a. Compare with an example, where necessary:
i. Contract liabilities versus contract assets (2½ Marks)
ii. Stand-alone selling price versus transaction price (2½ Marks)

b. Under IFRS 15, highlight SIX criteria to assess a contract. (6 Marks)

c. Explain what is meant by contract modification and state TWO ways in which it can be accounted for. (4 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2022 – L2 – SB – Q5 – Revenue from Contracts with Customers (IFRS 15)"

  • 20 Marks

FR – May 2022 – L2 – SB – Q4 – Statement of Cash Flows

Prepare the statement of cash flows for Odibeze Nigeria PLC for the year ended April 30, 2021, using the indirect method, and explain the term cash and cash equivalents.

The following financial statements were extracted from the 2021 annual report and accounts recently published by Odibeze Nigeria PLC.

Additional Information:

  1. During the financial year, the company made a bonus issue of one share for every six shares held and a cash issue at N1.90kobo per share to provide funds for its anticipated expansion.
  2. The company revalues its freehold properties annually, transferring any resulting surplus to the revaluation reserve.
  3. A plant with a carrying amount of N20,000,000 was disposed of on September 30, 2020, for N11,200,000. The depreciation charge for the remaining plant and machinery was N24,000,000.
  4. The investment income represents interest received on trade investments. Trade investments suffered an impairment loss of N10,000,000 by the year-end.
  5. The company paid an interim dividend of N25,000,000 and proposed a final dividend of N45,000,000.

Required:
a. Prepare the statement of cash flows of Odibeze Nigeria PLC for the year ended April 30, 2021, in accordance with IAS 7, using the indirect method. (17 Marks)
b. In the context of IAS 7 – Statement of Cash Flows, explain the term “cash and cash equivalents” and list THREE examples. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2022 – L2 – SB – Q4 – Statement of Cash Flows"

  • 3 Marks

FR – NOV 2016 – L2 – Q7b – Revenue from Contracts with Customers (IFRS 15)

Question tests understanding of IAS 11's methods for determining stage of completion in construction contracts.

Briefly explain TWO methods recognized by IAS 11 which can be used to determine the stage of completion of any contract.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – NOV 2016 – L2 – Q7b – Revenue from Contracts with Customers (IFRS 15)"

  • 12 Marks

FR – NOV 2016 – L2 – Q7a – Revenue from Contracts with Customers (IFRS 15)

Question tests understanding of how to account for long-term construction contracts, focusing on stage of completion and profit recognition.

Alpha Plc started a 4-year contract to build a dam. Activities commenced on February 1, 2015. The total contract price amounted to N30billion, and it was estimated that work would be completed at a total cost of N23.75billion. In the construction agreement, the customer agreed to accept increase in wages tariffs in addition to the contract price.

The following information relates to contract activities for the financial year ended December 31, 2015.

(1) Cost for the year:

N’million
Material 3,500
Labour 2,000
Operating Overheads 375
Subcontractors 450

(2) Current estimate of total contract costs indicates the following:

i. Material will be N450million higher than expected.

ii. Total labour cost will be N750million higher than expected. Of this amount only N600million will be the result of increase in wage tariffs. The remainder will be caused by inefficiencies.

iii. A savings of N75million is expected on operating overheads.

(3) During the year ended December 31 2015 the customer requested a variation to the original contract and it was agreed that the contract price would be increased by N2.250billion. The total estimated cost of this extra work is N1.875billion.

(4) By the end of year 2015, certificate issued by the quantity surveyors indicated a 25% stage of completion.

Required:

Calculate the profit to date based on:

i. Option A – Contract cost in proportion to estimated contract costs. (6 Marks)

ii. Option B – Percentage of work certified. (6 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – NOV 2016 – L2 – Q7a – Revenue from Contracts with Customers (IFRS 15)"

  • 20 Marks

FR – May 2022 – L2 – SB – Q3 – Consolidated Financial Statements

Prepare a consolidated statement of financial position for Daddy PLC as of December 31, 2020, incorporating the acquisition of Mummy PLC.

Daddy PLC is a first-tier entity quoted on the Nigerian Stock Exchange (NSE). The entity acquired 640 billion equity shares in Mummy PLC on January 1, 2020. The purchase consideration comprised the following:

  • Issue of one ordinary share of Daddy PLC in exchange for every two shares in Mummy PLC.
  • Issue of N100 12% loan notes in Daddy PLC in exchange for every 400 shares in Mummy PLC.
  • A cash payment of 15 kobo per share for every share acquired in Mummy PLC on January 1, 2020.

At the date of acquisition, the market price of Daddy PLC’s shares was 75 kobo each. The cost incurred by banks when a fixed-rate loan is paid out early is assumed to be nil. Also, Daddy PLC has recorded the 12% loan notes in the purchase consideration in the accounts.

Below are the statements of financial position for Daddy PLC and Mummy PLC as of December 31, 2020:

Additional Information:

  1. Mummy PLC’s net assets were at fair value except for an item of property, which had a fair value N50 billion higher than its carrying amount.
  2. The fair value of non-controlling interests at the date of acquisition was N100 billion.
  3. Mummy PLC sold goods worth N20 billion to Daddy PLC. N5 billion of these were included in Daddy PLC’s inventory as of December 31, 2020.
  4. Goodwill impairment of N30 billion.

You are required to prepare the consolidated statement of financial position as at December 31, 2020.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2022 – L2 – SB – Q3 – Consolidated Financial Statements"

  • 20 Marks

FR – May 2022 – L2 – SB – Q2 – Accounting Policies, Changes in Accounting Estimates, and Errors (IAS 8)

Explain accounting policies and estimates, and distinguish between changes in accounting policies and accounting estimates.

The aim of IAS 8 – Accounting Policies, Changes in Accounting Estimates, and Errors is to enhance the comparability of an entity’s financial statements with previous periods and with the financial statements of other entities.

Required:
Explain the terms, “accounting policies” and “accounting estimates.” (3 Marks)

b. In an in-house training for newly recruited trainee accountants in your organization, a disagreement arose on the distinction between change in accounting policies and change in accounting estimates. Consequent upon the above, the finance director requested you as the head of the accounting department to make a presentation on the subject matter.

Required:
Write a memo addressed to the finance director distinguishing changes in accounting policies and changes in accounting estimates, highlighting also the accounting treatment of the changes in accounting estimates. (8 Marks)

c. An extract from the non-current assets register of Eze Nigeria Limited at July 1, 2019, shows the following details:

Additional information includes details of impairment, revaluation, depreciation, and amortization.

Required:
Prepare, with comparative figures, statement of financial position extracts of Eze Nigeria Limited as at June 30, 2020. Show relevant notes for PPE and intangible assets. (9 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2022 – L2 – SB – Q2 – Accounting Policies, Changes in Accounting Estimates, and Errors (IAS 8)"

  • 11 Marks

FR – NOV 2016 – L2 – Q6b – Leases (IFRS 16)

Calculation of present value of lease payments and determination of lease type for equipment leasing arrangement.

Ijaw Oil Plc has entered into agreement to lease a plant and equipment from Ogoni Leasing Company Limited. The lease period of the plant and equipment is six (6) years. The agreement provides that Ogoni Leasing Company Limited will incur upkeep expenses. The cost of the plant and equipment is N900,000,000,000. The economic useful life is 20 years. Ijaw Oil Plc is to pay annual lease rentals of N150,000,000 in advance over 6 years after which the plant and equipment revert to the lessor. The implicit interest rate is 22% per annum which is stated below:

Year 0 1 2 3 4 5 6
PV(N1) 1.0000 0.8197 0.6719 0.5507 0.4514 0.3700 0.3033

You are required to:

i. Calculate the present value of the lease rental of the equipment. (4 Marks)

ii. Identify with justification the kind of lease involved (3 Marks)

iii. Advise on how to treat the lease rentals paid by Ijaw Oil Plc. in the financial statements (1 Mark)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – NOV 2016 – L2 – Q6b – Leases (IFRS 16)"

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@nbcinstitute.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
error: Content is protected !!
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan