FAC4861, NFA4861, ZFA4861

FAC4861/101/0/2015
ZFA4861/101/0/2015
NFA4861/101/0/2015
Tutorial Letter 101/0/2015
ADVANCED FINANCIAL ACCOUNTING I
FAC4861/ZFA4861/NFA4861
Year module
Department of Financial Governance
This tutorial letter contains important
information about your module.
Bar code
CONTENTS
1
INTRODUCTION ......................................................................................................................... 3
2
COMMUNICATION WITH THE UNIVERSITY ............................................................................. 3
2.1
2.2
2.3
Lecturers...................................................................................................................................... 3
Department .................................................................................................................................. 4
University ..................................................................................................................................... 4
3
MODULE RELATED RESOURCES ............................................................................................ 5
3.1
3.2
3.3
Tutorial matter.............................................................................................................................. 5
Prescribed books ......................................................................................................................... 5
Calculator policy .......................................................................................................................... 6
4
STUDENT SUPPORT SERVICES FOR THE MODULE .............................................................. 6
4.1
4.2
4.3
myUnisa ....................................................................................................................................... 6
Group discussions/Study schools ................................................................................................ 6
Unisa Library services information ............................................................................................... 6
5
MODULE SPECIFIC STUDY PLAN ............................................................................................ 7
5.1
5.2
Study programme ........................................................................................................................ 7
Content ........................................................................................................................................ 7
6
ASSESSMENT ............................................................................................................................ 8
6.1
6.2
6.2.1
6.2.2
6.2.3
6.2.4
6.2.5
6.3
Assessment plan ......................................................................................................................... 8
Tests ............................................................................................................................................ 8
Objectives .................................................................................................................................... 8
Test timetable .............................................................................................................................. 9
Open book policy ........................................................................................................................10
Administration of the tests ...........................................................................................................11
Remark of tests...........................................................................................................................11
Compulsory assignment 70.........................................................................................................12
7
EXAMINATIONS ........................................................................................................................13
Examination admission .............................................................................................................................13
APPENDIX A: Assignment 70 ...............................................................................................................14
2
FAC4861/ZFA4861/NFA4861/101
1
INTRODUCTION
We welcome you as a student to the Department of Financial Governance and trust that you will find the
academic year constructive and that you will be successful.
You will receive a number of tutorial letters during the year. A tutorial letter is our way of communicating
with you about teaching, learning and assessment. You must read all the tutorial letters you receive
during the year immediately and carefully, as they always contain important and, sometimes, urgent
information.
Tutorial letter 101 together with CASALL1 Tutorial letter 301 contains important information about the
scheme of work, resources and tests for this module. We urge you to read it carefully and to keep it at
hand when working through the study material, preparing for the tests and the examination and addressing
questions to your lecturers.
We hope that you will enjoy this module and wish you all the best!
2
COMMUNICATION WITH THE UNIVERSITY
2.1 Lecturers
FAC4861/ZFA4861/NFA4861
Personnel
Lecturers
Prof ZR Koppeschaar (CTA coordinator)
Ms J Sturdy (Course leader)
Mr H Meyer (Course leader)
Ms F Gaie-Booysen
Ms K Mohajane
Mr J Oberholzer
Ms L van Wyk
Ms R van der Westhuizen
Ms A Uys
Telephone
number
+27 12 429 4717
+27 12 429 4628
+27 12 429 4722
+27 12 429 3560
+27 12 429 4688
+27 12 429 4783
+27 12 429 2288
+27 12 429 8225
+27 12 429 4750
Availability of lecturers
Telephonically
You can contact your lecturers telephonically, by making use of the course contact number provided below.
An available lecturer will take your call and assist you as promptly as they can.
The course telephone number is: +27 12 429 4184
Personal visits
To avoid any disappointment, make an appointment with a lecturer as they are not always readily
available.
3
E-mail
You can also communicate with the lecturers via e-mail. Please note that feedback will not necessarily be
given via e-mail, thus it is important to give your student number, telephone number, fax number, e-mail
address and postal address.
Due to the high volumes of e-mails received by lecturers from students it is not always possible to reply to
these e-mails immediately. Please be patient as your e-mails will be attended to as soon as possible.
E-mail: [email protected]
Ensure that your student number, return address and telephone numbers are included with your
enquiries. Always have your student number at hand when contacting the University.
2.2 Department
The Department of Financial Governance is situated on the main campus on the second floor of the
AJH van der Walt Building.
Department of Financial Governance contact numbers:
•
•
•
Telephone: +27 12 429 4720 (postgraduate secretary – Financial Accounting).
Telephone: +27 12 429 4032 (postgraduate secretary – Auditing).
Fax:
+27 12 429 3424 (marked for a specific lecturer’s attention).
2.3 University
If you need to contact the University about matters not related to the content of this module, please consult
the publication myStudies@Unisa that you received with your study material. This booklet contains
information on how to contact the University (e.g. to whom you can write for different queries, important
telephone and fax numbers, addresses and details of the times certain facilities are open).
You can also contact Unisa as follows:
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
4
Registration enquiries (activation of registration, incorrect
registration, curriculum control, qualification audit, additional
modules for final year students)
Examination enquiries (outstanding results, exam timetable,
change of examination centre)
Remark/recheck enquiries
Final year concession
Study-info enquiries(official proof of registration, official
academic records, general enquiries)
Applications enquiries (new and returning students)
AME enquiries (foreign students qualifications and matriculation
exemptions)
Assignments enquiries
Financial enquiries (fees, outstanding balance, statements)
Study material enquiries
Assistance with myUnisa
Assistance with myLife e-mail accounts
College related enquiries (teach out, qualification articulation,
academic enquiries, everything relating to academic and tuition)
College related CTA enquiries (everything relating to academic
and tuition)
FAC4861/ZFA4861/NFA4861/101
SMS (32695 - only for students in South Africa)
Students may send an SMS to 32695 for more information on how to contact Unisa via SMS. The sender
will receive an auto response SMS with the various SMS options.
Postal address
University of South Africa, PO Box 392, Unisa, 0003
COMMENT
Always have your student number at hand when contacting the University.
3
MODULE RELATED RESOURCES
3.1 Tutorial matter
You will receive tutorial letters during the year. Some of this tutorial matter may not be available when you
register. Tutorial matter that is not available when you register will be posted to you as soon as possible.
Please note that all tutorial matter will always be electronically available on myUnisa.
Non receipt of hard copy study material does not constitute a valid reason for not being able to
prepare for tests/examination, as the study material will always be available for download from
myUnisa.
Internet
You can view the tutorial letters for the modules for which you are registered online on myUnisa at
http://my.unisa.ac.za
3.2 Prescribed books
FAC4861
SAICA Handbook 2014/2015
Descriptive Accounting
(also available in Afrikaans Beskrywende Rekeningkunde)
SAICA
Koppeschaar, ZR, et al.
LexisNexis; Durban 2014/2015
LexisNexis; Durban 19th edition – 2014
(Afrikaans –
25ste uitgawe – 2014)
COMMENT
Please refer to the list of official booksellers and their addresses in the myStudies@Unisa
brochure.
Prescribed books can be obtained from the University’s official booksellers. Should you have
any difficulties obtaining books from the official booksellers, please contact the Prescribed Book
Section as soon as possible at telephone number +27 12 429 4152 or e-mail
[email protected]
5
3.3 Calculator policy
Candidates may only use silent, electronic, battery-driven pocket calculators subject to the following
conditions:
•
•
•
Calculators must be cordless, and may not have print-out facilities; and
Calculators that have a full set of alpha characters/keys are prohibited (i.e. NO programmable
calculators are allowed).
Any financial calculator will be allowed, as the following tables will not be provided in any of the
tests/examinations:
Tables of present value factors for various discount rates for varying periods; and
Tables of future value factors for various interest rates for varying periods;
The calculator function on mobile telephones or any electronic device, including but not limited to
laptops and/or any Smart Phone may not be used; and
Candidates may not share a calculator with another candidate in the examination room.
4
STUDENT SUPPORT SERVICES FOR THE MODULE
•
•
Important information appears in your myStudies@Unisa brochure.
4.1 myUnisa
The myUnisa learning management system is Unisa's online campus that will help you to communicate
with your lecturers, with other students and with the administrative departments of Unisa – all through the
computer and the internet.
COMMENT
It is advisable that you access myUnisa on a weekly basis as additional material and
important notices are loaded on myUnisa.
To go to the myUnisa website, start at the main Unisa website, http://www.unisa.ac.za, and
then click on the “Login to myUnisa” link on the right-hand side of the screen. This should take
you to the myUnisa website. You can also go there directly by typing in http://my.unisa.ac.za.
Please consult the publication myStudies@Unisa, which you received with your study
material, for more information on myUnisa.
4.2 Group discussions/Study schools
Refer to general tutorial letter CASALL1 301/2015 for information regarding study schools.
4.3 Unisa Library services information
Unisa Library login
You will be required to provide your login details, ie. your student number and your myUnisa password, in
order to access the library’s online resources and services. This will enable you to view or print your
electronic course material, request library material, view and renew your library material and use the
library’s e-resources.
6
FAC4861/ZFA4861/NFA4861/101
Requesting books from the library
Students are expected to purchase their own copies of prescribed books listed in Tutorial Letters 101. A
limited number of copies are housed in the Unisa Libraries, subject to each branch library’s lending
regulations. Problems experienced in obtaining copies from booksellers should be directed to the
Prescribed Book section at e-mail [email protected] or telephone +27 12 429 4152.
5
MODULE SPECIFIC STUDY PLAN
5.1 Study programme
FAC4861 Overview
Date
Description
8 January 2015
4 March 2015 – 10 March 2015
17 March 2015
8 April 2015 – 14 April 2015
28 April 2015
4 May 2015
10 June 2015 – 16 June 2015
23 June 2015
8 July 2015 – 14 July 2015
4 August 2015
12 August 2015 – 18 August 2015
September 2015/ October 2015
Tutorial letter 101
Tutorial letter 102
Test 1
Tutorial letter 103
Test 2
Compulsory assignment 70
Tutorial letter 104
Test 3
Tutorial letter 105
Test 4
Tutorial letter 106
Revision/ Examination
5.2 Content
FAC4861
Tutorial
letter
Study
unit
102
1
2
103
Topics
3
4
5
6
General
Framework for the preparation and presentation of financial statements
and standard setting
Presentation of financial statements
Inventories
Income taxes
Accounting policies, changes in accounting estimates and errors
7
8
9
10
Property, plant and equipment
Intangible assets
Impairment of assets
Government grants and government assistance
7
Tutorial
letter
104
Study
unit
11
12
13
14
105
15
16
17
106
6
-
Topics
Revenue
Employee benefits
Events after the reporting date
Provisions, contingent liabilities and contingent assets
Leases
Financial instruments: Disclosure and presentation;
Financial instruments: Recognition and measurement
Earnings per share
Integrated questions/revision
ASSESSMENT
6.1 Assessment plan
It is very important to read the instructions and recommendations contained in this tutorial letter, as well as
in tutorial letter CASALL1 301/2015. This implies that you should work hard and long hours right from the
very beginning of the year. Study the subject matter, which will be given for each assignment, thoroughly,
and follow the assignment instructions as set out in this tutorial letter.
6.2 Tests
6.2.1 Objectives
You must remember that you are now busy with a postgraduate course which comprises vast volumes of
work. It is therefore not possible to start studying only a month or two before the final examination, and
expect to pass. Four tests will be written during the year in order to give you the opportunity to have your
progress evaluated. Please refer to tutorial letter CASALL1 301/2015 for more information regarding the
tests.
It is important that you should be accustomed to working under pressure as the time aspect of the
examination paper poses a problem to many students. The tests are not the only method of gaining
experience in working under pressure. If you complete the assignments in accordance with the suggested
procedures during the year, you will become accustomed to working against time. It is extremely important
that you become aware of the tempo at which you should work to be able to complete an examination
paper within the time allowed.
Please note that you are not allowed to write in pencil (tests and examination).
COMMENT
Consistent studying throughout the year will increase your chances of success in the final
examination.
8
FAC4861/ZFA4861/NFA4861/101
6.2.2 Test timetable
Test
Date
Tutorial letter
Nature of test
1
2
3
4
17 March 2015
28 April 2015
23 June 2015
4 August 2015
102
103
104
105
Limited open book
Limited open book
Limited open book
Limited open book
Breakdown of the tests into time slots
Students SHOULD be seated by no later than 08:30
(Students may be allowed to still enter the test venue BY NO LATER THAN 08:45 – once the reading time
commences)
FIRST SESSION
08:30 – 08:45
Handing out of Paper 1, answer scripts and a separate “REQUIRED”
section placed upside down.
08:45 – 09:00
Reading time
09:00 – 10:00
PAPER 1: (40 marks)
Advanced Taxation
CTA Level 1: TAX4861/NTA4861
SECOND SESSION
10:00 – 10:15
Collection of Paper 1 and handing out of Paper 2, answer scripts and a
separate “REQUIRED” section placed upside down.
10:15 – 10:30
Reading time
10:30 – 11:30
PAPER 2: (40 marks)
Advanced Financial Accounting l
CTA Level 1: FAC4861/ZFA4861/NFA4861
THIRD SESSION
11:30 – 11:45
Collection of Paper 2 and handing out of Paper 3, answer scripts and a
separate “REQUIRED” section placed upside down.
11:45 – 12:00
Reading time
12:00 – 13:00
PAPER 3: (40 marks)
Advanced Auditing
CTA Level 1: AUE4861/ZAU4861/NAU4861
13:00 – 13:15
BREAK / LUNCH
Collection of Paper 3
13:15 – 14:00
9
FOURTH SESSION
14:00 – 14:15
Handing out of Paper 4, answer scripts and a separate “REQUIRED”
section placed upside down.
14:15 – 14:30
Reading time
14:30 – 15:30
PAPER 4: (40 marks)
Advanced Management Accounting
CTA Level 1: MAC4861/ZMA4861/NMA4861
FIFTH SESSION
15:30 – 15:45
Collection of Paper 4 and handing out of Paper 5, answer scripts and a
separate “REQUIRED” section placed upside down.
15:45 – 16:00
Reading time
16:00 – 17:00
PAPER 5: (40 marks)
Advanced Financial Accounting ll
CTA Level 1: FAC4862/ZFA4862/NFA4862
17:00 – 17:15
Collection of Paper 5.
Unisa test and examination rules and regulations
The following represent a summary of the most pertinent rules and regulations:
•
No candidate will be allowed to leave the venue during the first hour and the final 15 minutes of a
session.
•
In addition, no candidate will be allowed to enter the venue once reading time has started (see
breakdown of tests into time slots on pages 9 to 10).
•
Students will not be allowed to keep their bags, brief cases etc. with them during the
test/examination. You will have to remove your stationary, food, books and study material which you
are allowed to use in the test/examination from their bags prior to the start of the session.
•
The University accepts no responsibility for loss of private property at the test/examination venues.
•
Students who are registered for only one or two papers have to be seated 15 minutes before reading
time. (See breakdown of tests into time slots on pages 9 to 10)
6.2.3 Open book policy
A limited open book approach is followed by SAICA for the Initial Test of Competence (ITC) Examination
and Unisa follows a similar approach for tests and examinations.
Permitted texts in tests and examinations
No access to the internet shall be permitted during the tests/examinations (either by means of computers,
cell phones, smart phones, tablets or any other similar technology).
Candidates will be allowed to bring only the following texts into the test/examination venue.
1.
10
The three volumes on International Financial Reporting Standards that form part of the SAICA
Student’s Handbooks. (“A Guide through IFRS”).
•
Part A
•
Part B1
•
Part B2
•
Any supplements published from time to time.
FAC4861/ZFA4861/NFA4861/101
2.
The two volumes of the SAICA Handbook
•
Volume 2 – Auditing
•
Volume 3 – Accounting, Ethics and Circulars
3.
The three volumes of the SAICA Legislation Handbook
•
Volume 1
•
Volume 2
•
Volume 3
COMMENT
Only ONE version of each of the above books may be brought into the examination venue,
although it may be either a version published in the current year or a version published in one of
the previous years.
Candidates will only be allowed to highlight, underline, sideline and flag in the permitted texts.
Writing on flags is permitted for reference and cross-referencing purposes only, that is, writing may only
refer to the name or number of the relevant discipline standard, statement or section in the legislation.
Candidates may not have in their possession any loose papers (whether affixed to the permitted texts or
not). Only properly bound standard publishers’ editions will be permitted. Photocopies, printed copies of
electronic versions, loose sections or isolated pages of texts are prohibited.
Any contravention of these regulations will be considered to be misconduct and shall be dealt with
in terms of regulation 11 (which sets out the rules applying to misconduct).
6.2.4 Administration of the tests
Please note that you will be notified of the centre at which you will be able to write the tests and that it may
not necessarily be the same centre where you will write the final examination. Answer books will be
provided.
Your answer book will be posted to you after they have been marked. As soon as the marks are available
they will be put on Internet (https://myUnisa.ac.za/portal). Each question must be answered in a separate
book. Please write your student number and full postal address on the cover of each answer book.
You are requested not to phone the lecturers or secretaries for your test marks because they do not keep
record of the test marks.
6.2.5 Remark of tests
Should you be unhappy with your test marking, please follow the following steps:
•
•
•
•
Forward your original script to the following address:
The Subject Coordinator (Prof ZR Koppeschaar)
Department of Financial Governance
AJH van der Walt Building
PO Box 392
UNISA
0003
It is very important that you make a copy of your test script before you send the original script.
You must include an explanation of why you would like your test to be remarked, as well as an
indication of instances where you were not awarded marks according to the suggested solution (the
suggested solution will be available on myUnisa).
When you send your test for a remark, the test in total will be remarked and not only certain sections.
Should you receive a lower mark on the remark, your test mark will be adjusted accordingly.
11
•
•
Please note that you have a limited period to query your tests results. No test marks will be
adjusted after the expiry of this period. The following dates are applicable:
Test
Test date
1
2
3
4
17 March 2015
28 April 2015
23 June 2015
4 August 2015
Test remark requested
before
12 May 2015
16 June 2015
3 August 2015
31 August 2015
Unethical conduct
We have noted in the past that students have submitted tests for remarks after they have written in
additional information as part of the solution after receiving the tests back. This is included in the
definition of cheating as per the Unisa Students’ Disciplinary Code in Chapter 3, as it relates to the
commission of any other fraudulent or dishonest practice whereby a student, whilst being
examined by the University, seeks to mislead or deceive the examiner or the examination officer.
Students found guilty of writing additional information in tests after receiving it back will be
facing disciplinary steps as it is unethical conduct.
6.3 Compulsory assignment 70
Submission of the compulsory assignment 70 by its due date, as well as obtaining at least a 30% year mark
for the best three tests during the year will give a student admission to the examination. The assignment is
attached as Annexure A of this tutorial letter.
Please ensure that your assignment 70 reaches the University before the due date of 4 May 2015. Late
submission of assignment 70 will result in you not being admitted to the examination.
Assignments should be addressed to:
The Registrar
PO Box 392
UNISA
0003
You may submit the compulsory assignment on the mark-reading sheet by mail, or electronically via
myUnisa. Assignments may not be submitted by fax or e-mail. For detailed information and
requirements as far as assignments are concerned, see the brochure myStudies@Unisa that you received
with your study material.
To submit the assignment via myUnisa:
•
Go to myUnisa.
•
Log in with your student number and password.
•
Select the course code from the orange bar.
•
Click on assignments in the left-hand menu.
•
Click on the assignment number you want to submit.
•
Follow the instructions on the screen.
12
FAC4861/ZFA4861/NFA4861/101
7
EXAMINATIONS
Use your myStudies@Unisa brochure for general examination guidelines and examination preparation
guidelines.
Examination admission
Only students who comply with the following, will be allowed to sit for the examination:
•
•
•
Registered students who paid their study fees in full; and
submitted their compulsory assignment; and
have a minimum year mark of 30% for the best three tests during the year.
You may use a non-programmable pocket calculator in the tests and examination. However, you are
reminded that you must still show all your calculations. You may lose valuable marks if the examiner cannot
see what you calculated and how and why you calculated it.
COMMENT
The average mark of the three best tests of each paper (module) will constitute the student’s
year mark. You need 30% to obtain examination admissions.
If only one or two tests are written, the total marks of the tests written will be divided by three to
obtain the year mark. If no test is written the year mark will be nil.
The year mark contributes 20% and the examination 80% towards the final mark.
13
APPENDIX A: Assignment 70
Please ensure that assignment 70 reaches the University before 4 May 2015 – late submission of the
assignment will result in you not being admitted to the examination.
ADVANCED FINANCIAL ACCOUNTING I - UNIQUE NUMBER
FAC4861
ZFA4861
NFA4861
611248
603687
604537
ASSIGNMENT 70 – QUESTIONS
FAC/ZFA/NFA4861
1.
The South African current tax expense of Z Ltd for the year ended 31 December 20.11 amounted to
R280 000. In addition to this, tax of R3 000 was due to the Botswana taxation authorities on
31 December 20.11, in respect of income earned in that country. Provisional tax payments of
R287 000 were paid over to the SARS during 20.11. The VAT control account reflected a debit
balance of R12 000 on 31 December 20.11.
The above information will be shown as follows in Z Ltd’s statement of financial position on
31 December 20.11:
(1)
(2)
(3)
(4)
(5)
A current asset (tax receivable) of R1 000.
A current asset (tax receivable) of R16 000 and a current liability (tax payable) of R15 000.
A current asset (tax receivable) of R19 000 and a current liability (tax payable) of R3 000.
A current asset (tax receivable) of R4 000 and a current liability (tax payable) of R3 000.
None of the above.
The following information relates to Questions 2 and 4:
2.
Stardy Ltd acquired an asset with a useful life of 10 years on 1 January 20.9 for an amount of
R2 000 000. On 1 January 20.10, the asset was revalued with R900 000. At the end of 20.10 there
was an indication that it might be impaired and the recoverable amount was estimated to be
R1 000 000 at that stage. On 31 December 20.11 there was an indication that this impairment loss
might have reversed and the recoverable amount was estimated to be R2 600 000 at that stage. The
revaluation surplus is regarded as realised only on disposal of the asset. Depreciation is calculated
on the straight-line basis with no residual value. Tax should be ignored.
Calculate the depreciation charge for the year ended 31 December 20.10.
(1)
(2)
(3)
(4)
(5)
14
R270 000
R337 500
R295 000
R300 000
None of the above
FAC4861/ZFA4861/NFA4861/101
3.
Calculate the impairment loss amount that will be recognised in profit or loss for the year ended
31 December 20.10.
(1)
(2)
(3)
(4)
(5)
4.
Calculate the total reversal of impairment loss amount for the year ended 31 December 20.11
(1)
(2)
(3)
(4)
(5)
5.
R1 400 000
R900 000
R500 000
R1 700 000
None of the above
R1 225 000
R1 100 000
R1 725 000
R875 000
None of the above
Fishnet Ltd has 50 employees, who are each entitled to 10 working days non vesting paid annual
leave for each completed year of service. Unused paid annual leave may be carried forward for one
calendar year.
At 31 December 20.12, the average unused entitlement is 4 days per employee. Based on past
experience, the entity expects that 41 employees will take 10 days paid annual leave in 20.13 and the
remaining 9 employees will each take an average of 14 days paid leave each also in 20.13. Assume
the daily pay rate per employee to be used in the calculation is R60, and that 10% of the
41 employees will resign during 20.13 before taking their leave.
Assuming that paid annual leave is first taken out of the previous year’s entitlement and then out of
the current year’s entitlement (FIFO method), calculate leave pay liability to be accrued for the year
end 31 December 20.12.
(1)
(2)
(3)
(4)
(5)
6.
R2 160
R9 840
R12 000
R11 040
None of the above
Fishnet Ltd has 50 employees, who are each entitled to 10 working days non vesting paid annual
leave for each completed year of service. Unused paid annual leave may be carried forward for one
calendar year.
At 31 December 20.12, the average unused entitlement is 4 days per employee. Based on past
experience, the entity expects that 41 employees will take 10 days paid annual leave in 20.13 and the
remaining 9 employees will each take an average of 14 days paid leave each also in 20.13. Assume
the daily pay rate per employee to be used in the calculation is R60, and that 10% of the
41 employees will resign during 20.13 before taking their leave.
Assuming that paid annual leave is first taken out of the current year’s entitlement and then out of the
previous year's entitlement (LIFO method), calculate leave to be accrued for the year end
31 December 20.12.
(1)
(2)
(3)
(4)
(5)
R4 500
R9 840
R12 000
R11 040
R2 160
15
7.
The following information relates to Jumbo Ltd for the year ended 31 December 20.7:
Machinery
Cost
Accumulated depreciation (31/12/20.6)
Carrying amount (31/12/20.6)
Tax base (31/12/20.6)
Market value (1/1/20.7)
Remaining useful life on 31/12/20.7
A
R
500 000
100 000
400 000
300 000
520 000
7 years
B
R
400 000
120 000
280 000
160 000
420 000
6 years
C
R
350 000
35 000
315 000
280 000
300 000
8 years
Additional information
1.
Machinery was revalued for the first time on 1 January 20.7.
2.
A sudden decision was taken on 31 December 20.7 to sell machine A on 2 January 20.8.
3.
SARS allow a deduction (not apportioned) of 20% of the cost of the machinery in each year for
five years.
4.
Revaluation surpluses realise as the assets are being used.
5.
Assume a tax rate of 28% and that capital gains are taxed in terms of current tax legislation.
What amount should be debited from the revaluation surplus through other comprehensive income to
the deferred tax account?
(1)
(2)
(3)
(4)
(5)
8.
Refer to the information in question 7. How much should be transferred on 31 December 20.7 from
the revaluation surplus to retained earnings?
(1)
(2)
(3)
(4)
(5)
16
R72 800
R70 000
R67 200
R65 800
None of the above.
R27 450
R35 000
R25 200
R29 000
None of the above.
FAC4861/ZFA4861/NFA4861/101
9.
On 30 June 20.10 X Ltd withdrew a machine, with a carrying amount of R300 000, from use as it was
not performing well. The cost of the machine amounted to R500 000 and depreciation is written off at
10% per annum on costs. The machine was only disposed of during the next financial year. What is
the correct accounting treatment for the machine from 1 July 20.10 to 31 December 20.10, the
company’s financial year-end? (Assume that the asset does not qualify in terms of IFRS 5 to be
classified as held for sale)
(1)
(2)
(3)
(4)
(5)
10.
Recognise depreciation at 10% per annum for six months.
Do not recognise any depreciation.
Recognise depreciation at 10% per annum for six months and test the machine for impairment
on 31 December 20.10.
Do not recognise any depreciation and test the machine for impairment on 31 December 20.10.
None of the above.
The carrying amount of an asset amounts to R200 000 at year-end. At this date the asset can be
sold for R170 000 in an arm’s length transaction. If the asset is used for its remaining useful life of
three years, it will annually generate net cash inflows of R80 000 before tax and will have no residual
value. A fair discount rate is 10,8% after taking tax at 28% into account. Calculate the impairment
loss at year-end.
(1)
(2)
(3)
(4)
(5)
R2 790
R17 342
R30 000
Rnil
None of the above.
17