24 What figure should appear in the consolidated balance sheet of the J group as at 31 December 2004 for minorityinterest?A $32,000B $16,000C $10,000D $24,000

第1题：

4 Ryder, a public limited company, is reviewing certain events which have occurred since its year end of 31 October

2005. The financial statements were authorised on 12 December 2005. The following events are relevant to the

financial statements for the year ended 31 October 2005:

(i) Ryder has a good record of ordinary dividend payments and has adopted a recent strategy of increasing its

dividend per share annually. For the last three years the dividend per share has increased by 5% per annum.

On 20 November 2005, the board of directors proposed a dividend of 10c per share for the year ended

31 October 2005. The shareholders are expected to approve it at a meeting on 10 January 2006, and a

dividend amount of $20 million will be paid on 20 February 2006 having been provided for in the financial

statements at 31 October 2005. The directors feel that a provision should be made because a ‘valid expectation’

has been created through the company’s dividend record. (3 marks)

(ii) Ryder disposed of a wholly owned subsidiary, Krup, a public limited company, on 10 December 2005 and made

a loss of $9 million on the transaction in the group financial statements. As at 31 October 2005, Ryder had no

intention of selling the subsidiary which was material to the group. The directors of Ryder have stated that there

were no significant events which have occurred since 31 October 2005 which could have resulted in a reduction

in the value of Krup. The carrying value of the net assets and purchased goodwill of Krup at 31 October 2005

were $20 million and $12 million respectively. Krup had made a loss of $2 million in the period 1 November

2005 to 10 December 2005. (5 marks)

(iii) Ryder acquired a wholly owned subsidiary, Metalic, a public limited company, on 21 January 2004. The

consideration payable in respect of the acquisition of Metalic was 2 million ordinary shares of $1 of Ryder plus

a further 300,000 ordinary shares if the profit of Metalic exceeded $6 million for the year ended 31 October

2005. The profit for the year of Metalic was $7 million and the ordinary shares were issued on 12 November

2005. The annual profits of Metalic had averaged $7 million over the last few years and, therefore, Ryder had

included an estimate of the contingent consideration in the cost of the acquisition at 21 January 2004. The fair

value used for the ordinary shares of Ryder at this date including the contingent consideration was $10 per share.

The fair value of the ordinary shares on 12 November 2005 was $11 per share. Ryder also made a one for four

bonus issue on 13 November 2005 which was applicable to the contingent shares issued. The directors are

unsure of the impact of the above on earnings per share and the accounting for the acquisition. (7 marks)

(iv) The company acquired a property on 1 November 2004 which it intended to sell. The property was obtained

as a result of a default on a loan agreement by a third party and was valued at $20 million on that date for

accounting purposes which exactly offset the defaulted loan. The property is in a state of disrepair and Ryder

intends to complete the repairs before it sells the property. The repairs were completed on 30 November 2005.

The property was sold after costs for $27 million on 9 December 2005. The property was classified as ‘held for

sale’ at the year end under IFRS5 ‘Non-current Assets Held for Sale and Discontinued Operations’ but shown at

the net sale proceeds of $27 million. Property is depreciated at 5% per annum on the straight-line basis and no

depreciation has been charged in the year. (5 marks)

(v) The company granted share appreciation rights (SARs) to its employees on 1 November 2003 based on ten

million shares. The SARs provide employees at the date the rights are exercised with the right to receive cash

equal to the appreciation in the company’s share price since the grant date. The rights vested on 31 October

2005 and payment was made on schedule on 1 December 2005. The fair value of the SARs per share at

31 October 2004 was $6, at 31 October 2005 was $8 and at 1 December 2005 was $9. The company has

recognised a liability for the SARs as at 31 October 2004 based upon IFRS2 ‘Share-based Payment’ but the

liability was stated at the same amount at 31 October 2005. (5 marks)

Required:

Discuss the accounting treatment of the above events in the financial statements of the Ryder Group for the year

ended 31 October 2005, taking into account the implications of events occurring after the balance sheet date.

(The mark allocations are set out after each paragraph above.)

(25 marks)

正确答案：
4 (i) Proposed dividend
The dividend was proposed after the balance sheet date and the company, therefore, did not have a liability at the balance
sheet date. No provision for the dividend should be recognised. The approval by the directors and the shareholders are
enough to create a valid expectation that the payment will be made and give rise to an obligation. However, this occurred
after the current year end and, therefore, will be charged against the profits for the year ending 31 October 2006.
The existence of a good record of dividend payments and an established dividend policy does not create a valid expectation
or an obligation. However, the proposed dividend will be disclosed in the notes to the financial statements as the directors
approved it prior to the authorisation of the financial statements.
(ii) Disposal of subsidiary
It would appear that the loss on the sale of the subsidiary provides evidence that the value of the consolidated net assets of
the subsidiary was impaired at the year end as there has been no significant event since 31 October 2005 which would have
caused the reduction in the value of the subsidiary. The disposal loss provides evidence of the impairment and, therefore,
the value of the net assets and goodwill should be reduced by the loss of $9 million plus the loss ($2 million) to the date of
the disposal, i.e. $11 million. The sale provides evidence of a condition that must have existed at the balance sheet date
(IAS10). This amount will be charged to the income statement and written off goodwill of $12 million, leaving a balance of
$1 million on that account. The subsidiary’s assets are impaired because the carrying values are not recoverable. The net
assets and goodwill of Krup would form. a separate income generating unit as the subsidiary is being disposed of before the
financial statements are authorised. The recoverable amount will be the sale proceeds at the date of sale and represents the
value-in-use to the group. The impairment loss is effectively taking account of the ultimate loss on sale at an earlier point in
time. IFRS5, ‘Non-current assets held for sale and discontinued operations’, will not apply as the company had no intention
of selling the subsidiary at the year end. IAS10 would require disclosure of the disposal of the subsidiary as a non-adjusting
event after the balance sheet date.
(iii) Issue of ordinary shares
IAS33 ‘Earnings per share’ states that if there is a bonus issue after the year end but before the date of the approval of the
financial statements, then the earnings per share figure should be based on the new number of shares issued. Additionally
a company should disclose details of all material ordinary share transactions or potential transactions entered into after the
balance sheet date other than the bonus issue or similar events (IAS10/IAS33). The principle is that if there has been a
change in the number of shares in issue without a change in the resources of the company, then the earnings per share
calculation should be based on the new number of shares even though the number of shares used in the earnings per share
calculation will be inconsistent with the number shown in the balance sheet. The conditions relating to the share issue
(contingent) have been met by the end of the period. Although the shares were issued after the balance sheet date, the issue
of the shares was no longer contingent at 31 October 2005, and therefore the relevant shares will be included in the
computation of both basic and diluted EPS. Thus, in this case both the bonus issue and the contingent consideration issue
should be taken into account in the earnings per share calculation and disclosure made to that effect. Any subsequent change
in the estimate of the contingent consideration will be adjusted in the period when the revision is made in accordance with
IAS8.
Additionally IFRS3 ‘Business Combinations’ requires the fair value of all types of consideration to be reflected in the cost of
the acquisition. The contingent consideration should be included in the cost of the business combination at the acquisition
date if the adjustment is probable and can be measured reliably. In the case of Metalic, the contingent consideration has
been paid in the post-balance sheet period and the value of such consideration can be determined ($11 per share). Thus
an accurate calculation of the goodwill arising on the acquisition of Metalic can be made in the period to 31 October 2005.
Prior to the issue of the shares on 12 November 2005, a value of $10 per share would have been used to value the
contingent consideration. The payment of the contingent consideration was probable because the average profits of Metalic
averaged over $7 million for several years. At 31 October 2005 the value of the contingent shares would be included in a
separate category of equity until they were issued on 12 November 2005 when they would be transferred to the share capital
and share premium account. Goodwill will increase by 300,000 x ($11 – $10) i.e. $300,000.
(iv) Property
IFRS5 (paragraph 7) states that for a non-current asset to be classified as held for sale, the asset must be available for
immediate sale in its present condition subject to the usual selling terms, and its sale must be highly probable. The delay in
this case in the selling of the property would indicate that at 31 October 2005 the property was not available for sale. The
property was not to be made available for sale until the repairs were completed and thus could not have been available for
sale at the year end. If the criteria are met after the year end (in this case on 30 November 2005), then the non-current
asset should not be classified as held for sale in the previous financial statements. However, disclosure of the event should
be made if it meets the criteria before the financial statements are authorised (IFRS5 paragraph 12). Thus in this case,
disclosure should be made.
The property on the application of IFRS5 should have been carried at the lower of its carrying amount and fair value less
costs to sell. However, the company has simply used fair value less costs to sell as the basis of valuation and shown the
property at $27 million in the financial statements.
The carrying amount of the property would have been $20 million less depreciation $1 million, i.e. $19 million. Because
the property is not held for sale under IFRS5, then its classification in the balance sheet will change and the property will be
valued at $19 million. Thus the gain of $7 million on the wrong application of IFRS5 will be deducted from reserves, and
the property included in property, plant and equipment. Total equity will therefore be reduced by $8 million.
(v) Share appreciation rights
IFRS2 ‘Share-based payment’ (paragraph 30) requires a company to re-measure the fair value of a liability to pay cash-settled
share based payment transactions at each reporting date and the settlement date, until the liability is settled. An example of
such a transaction is share appreciation rights. Thus the company should recognise a liability of ($8 x 10 million shares),
i.e. $80 million at 31 October 2005, the vesting date. The liability recognised at 31 October 2005 was in fact based on the
share price at the previous year end and would have been shown at ($6 x 1/2) x 10 million shares, i.e. $30 million. This
liability at 31 October 2005 had not been changed since the previous year end by the company. The SARs vest over a twoyear
period and thus at 31 October 2004 there would be a weighting of the eventual cost by 1 year/2 years. Therefore, an
additional liability and expense of $50 million should be accounted for in the financial statements at 31 October 2005. The
SARs would be settled on 1 December 2005 at $9 x 10 million shares, i.e. $90 million. The increase in the value of the
SARs since the year end would not be accrued in the financial statements but charged to profit or loss in the year ended31 October 2006.

第2题：

(b) Prepare a consolidated statement of financial position of the Ribby Group at 31 May 2008 in accordance

with International Financial Reporting Standards. (35 marks)

正确答案：

第3题：

20 Which of the following events occurring after the balance sheet date are classified as adjusting, if material?

1 The sale of inventories valued at cost at the balance sheet date for a figure in excess of cost.

2 A valuation of land and buildings providing evidence of an impairment in value at the year end.

3 The issue of shares and loan notes.

4 The insolvency of a customer with a balance outstanding at the year end.

A 1 and 3

B 2 and 4

C 2 and 3

D 1 and 4

正确答案：B

第4题：

5 Which of the following events after the balance sheet date would normally qualify as adjusting events according

to IAS 10 Events after the balance sheet date?

1 The bankruptcy of a credit customer with a balance outstanding at the balance sheet date.

2 A decline in the market value of investments.

3 The declaration of an ordinary dividend.

4 The determination of the cost of assets purchased before the balance sheet date.

A 1, 3, and 4

B 1 and 2 only

C 2 and 3 only

D 1 and 4 only

正确答案：D

第5题：

25 What should the minority interest figure be in the group’s consolidated balance sheet at 31 December 2005?

A $240,000

B $80,000

C $180,000

D $140,000

正确答案：A
20% x (400,000 + 800,000)

第6题：

(b) Explain the matters that should be considered when planning the nature and scope of the examination of

Cusiter Co’s forecast balance sheet and income statement as prepared for the bank. (7 marks)

正确答案：
(b) Matters to be considered
Tutorial note: Candidates at this level must appreciate that the matters to be considered when planning the nature and
scope of the examination are not the same matters to be considered when deciding whether or not to accept an
engagement. The scenario clearly indicates that the assignment is being undertaken by the current auditor rendering any
‘pre-engagement’/‘professional etiquette’ considerations irrelevant to answering this question.
This PFI has been prepared to show an external user, the bank, the financial consequences of Cusiter’s plans to help the bank
in making an investment decision. If Cusiter is successful in its loan application the PFI provides a management tool against
which the results of investing in the plant and equipment can be measured.
The PFI is unpublished rather than published. That is, it is prepared at the specific request of a third party, the bank. It will
not be published to users of financial information in general.
The auditor’s report on the PFI will provide only negative assurance as to whether the assumptions provide a reasonable basis
for the PFI and an opinion whether the PFI is:
■ properly prepared on the basis of the assumptions; and
■ presented in accordance with the relevant financial reporting framework.
The nature of the engagement is an examination to obtain evidence concerning:
■ the reasonableness and consistency of assumptions made;
■ proper preparation (on the basis of stated assumptions); and
■ consistent presentation (with historical financial statements, using appropriate accounting principles).
Such an examination is likely to take the form. of inquiry, analytical procedures and corroboration.
The period of time covered by the prospective financial information is two years. The assumptions for 2008 are likely to be
more speculative than for 2007, particularly in relation to the impact on earnings, etc of the investment in new plant and
equipment.
The forecast for the year to 31 December 2007 includes an element of historical financial information (because only part of
this period is in the future) hence actual evidence should be available to verify the first three months of the forecast (possibly
more since another three-month period will expire at the end of the month).
Cusiter management’s previous experience in preparing PFI will be relevant. For example, in making accounting estimates
(e.g. for provisions, impairment losses, etc) or preparing cash flow forecasts (e.g. in support of the going concern assertion).
The basis of preparation of the forecast. For example, the extent to which it comprises:
■ proforma financial information (i.e. historical financial information adjusted for the effects of the planned loan and capital
expenditure transaction);
■ new information and assumptions about future performance (e.g. the operating capacity of the new equipment, sales
generated, etc).
The nature and scope of any standards/guidelines under which the PFI has been prepared is likely to assist the auditor in
discharging their responsibilities to report on it. Also, ISAE 3400 The Examination of Prospective Financial Information,
establishes standards and provides guidance on engagements to examine and report on PFI including examination
procedures.
The planned nature and scope of the examination is likely to take into account the time and fee budgets for the assignments
as adjusted for any ‘overlap’ with audit work. For example, the examination of the PFI is likely to draw on the auditor’s
knowledge of the business obtained in auditing the financial statements to 31 December 2006. Analytical procedures carried
out in respect of the PFI may provide evidence relevant to the 31 December 2007 audit.

第7题：

A: What day is it today? B: December 24.()

此题为判断题(对，错)。

参考答案：错误

第8题：

A balance sheet is simply the enumeration of the various assets of a business on one side of a ledger and the enumeration of various liabilities and (61) accounts on the other side. The two sides must be equal, or balance. Only one further point should be (62) : A balance sheet refers to a single point in time, for example, the close of business on December 31. Taken by itself, a balance sheet does not show (63) over time. It is what economists call a stock concept, not a (64) concept. That is, the balance sheet shows the stock of goods a firm has on hand at any particular instant and does not show the flow of goods through the firm over time. For this reason, a balance sheet does not show business (65) , which are a flow.

(46)

A．profit

B．capital

C．income

D．cash

正确答案：B
解析：资产负债表分为三部分：资产、负债、所有者权益。capital accounts等于owner's equity。

第9题：

What does the accountant do in recording assets and liabilities according to the stable-monetary-unit concept?

A．He simply adds all the amounts together.

B．He puts the assets and liabilities on the balance sheet objectively.

C．He makes restatement if the value of money depreciates.

D．He records the assets and liabilities on the balance sheet ignoring the change in purchasing power value of the currency.

正确答案：D
解析：文章最后一段提到The stable-monetary-unit concept is the accountant's…the changing value of the dollar。统一货币计量单位使得会计在编制资产负债表的时候不用去考虑通货膨胀和美元贬值的影响。所以D选项符合题意。

第10题：

The balance of the allowance for doubtful accounts is added to accounts receivable on the balance sheet.()

正确答案：错

第11题：

You have an Exchange Server 2010 organization.You have a group named Group1 that contains 10，000 members.You need to ensure that an informative message is displayed when users add Group1 to the recipient list of an e-mail message. What should you do？（）

A、Configure a MailTip.
B、Create a transport rule.
C、Create a Send connector.
D、Configure an expansion server.

正确答案:A

第12题：

单选题

You have an Exchange Server 2010 organization.You have a group named Group1 that contains 10，000 members.You need to ensure that an informative message is displayed when users add Group1 to the recipient list of an e-mail message. What should you do？（）

A

Configure a MailTip.

B

Create a transport rule.

C

Create a Send connector.

D

Configure an expansion server.

正确答案： A

解析：暂无解析

第13题：

(b) Prepare the balance sheet of York at 31 October 2006, using International Financial Reporting Standards,

discussing the nature of the accounting treatments selected, the adjustments made and the values placed

on the items in the balance sheet. (20 marks)

正确答案：

Gow’s net assets
IAS36 ‘Impairment of Assets’, sets out the events that might indicate that an asset is impaired. These circumstances include
external events such as the decline in the market value of an asset and internal events such as a reduction in the cash flows
to be generated from an asset or cash generating unit. The loss of the only customer of a cash generating unit (power station)
would be an indication of the possible impairment of the cash generating unit. Therefore, the power station will have to be
impairment tested.
The recoverable amount will have to be determined and compared to the value given to the asset on the setting up of the
joint venture. The recoverable amount is the higher of the cash generating unit’s fair value less costs to sell, and its value-inuse.
The fair value less costs to sell will be $15 million which is the offer for the purchase of the power station ($16 million)
less the costs to sell ($1 million). The value-in-use is the discounted value of the future cash flows expected to arise from the
cash generating unit. The future dismantling costs should be provided for as it has been agreed with the government that it
will be dismantled. The cost should be included in the future cash flows for the purpose of calculating value-in-use and
provided for in the financial statements and the cost added to the property, plant and equipment ($4 million ($5m/1·064)).
The value-in-use based on a discount rate of 6 per cent is $21 million (working). Therefore, the recoverable amount is
$21 million which is higher than the carrying value of the cash generating unit ($20 million) and, therefore, the value of the
cash generating unit is not impaired when compared to the present carrying value of $20 million (value before impairment
test).
Additionally IAS39, ‘Financial Instruments: recognition and measurement’, says that an entity must assess at each balance
sheet date whether a financial asset is impaired. In this case the receivable of $7 million is likely to be impaired as Race is
going into administration. The present value of the estimated future cash flows will be calculated. Normally cash receipts from
trade receivables will not be discounted but because the amounts are not likely to be received for a year then the anticipated
cash payment is 80% of ($5 million × 1/1·06), i.e. $3·8 million. Thus a provision for the impairment of the trade receivables
of $3·2 million should be made. The intangible asset of $3 million would be valueless as the contract has been terminated.
Glass’s Net Assets
The leased property continues to be accounted for as property, plant and equipment and the carrying amount will not be
adjusted. However, the remaining useful life of the property will be revised to reflect the shorter term. Thus the property will
be depreciated at $2 million per annum over the next two years. The change to the depreciation period is applied prospectively
not retrospectively. The lease liability must be assessed under IAS39 in order to determine whether it constitutes a
de-recognition of a financial liability. As the change is a modification of the lease and not an extinguishment, the lease liability
would not be derecognised. The lease liability will be adjusted for the one off payment of $1 million and re-measured to the
present value of the revised future cash flows. That is $0·6 million/1·07 + $0·6 million/(1·07 × 1·07) i.e. $1·1 million. The
adjustment to the lease liability would normally be recognised in profit or loss but in this case it will affect the net capital
contributed by Glass.
The termination cost of the contract cannot be treated as an intangible asset. It is similar to redundancy costs paid to terminate
a contract of employment. It represents compensation for the loss of future income for the agency. Therefore it must be
removed from the balance sheet of York. The recognition criteria for an intangible asset require that there should be probable
future economic benefits flowing to York and the cost can be measured reliably. The latter criterion is met but the first criterion
is not. The cost of gaining future customers is not linked to this compensation.
IAS18 ‘Revenue’ contains a concept of a ‘multiple element’ arrangement. This is a contract which contains two or more
elements which are in substance separate and are separately identifiable. In other words, the two elements can operate
independently from each other. In this case, the contract with the overseas company has two distinct elements. There is a
contract not to supply gas to any other customer in the country and there is a contract to sell gas at fair value to the overseas
company. The contract has not been fulfilled as yet and therefore the payment of $1·5 million should not be taken to profit
or loss in its entirety at the first opportunity. The non supply of gas to customers in that country occurs over the four year
period of the contract and therefore the payment should be recognised over that period. Therefore the amount should be
shown as deferred income and not as a deduction from intangible assets. The revenue on the sale of gas will be recognised
as normal according to IAS18.
There may be an issue over the value of the net assets being contributed. The net assets contributed by Glass amount to
$21·9 million whereas those contributed by Gow only total $13·8 million after taking into account any adjustments required
by IFRS. The joint venturers have equal shareholding in York but no formal written agreements, thus problems may arise ifGlass feels that the contributions to the joint venture are unequal.

第14题：

8 P and Q are in partnership, sharing profits in the ratio 2:1. On 1 July 2004 they admitted P’s son R as a partner. P

guaranteed that R’s profit share would not be less than $25,000 for the six months to 31 December 2004. The profitsharing

arrangements after R’s admission were P 50%, Q 30%, R 20%. The profit for the year ended 31 December

2004 is $240,000, accruing evenly over the year.

What should P’s final profit share be for the year ended 31 December 2004?

A $140,000

B $139,000

C $114,000

D $139,375

正确答案：B
80,000 + 60,000 – 1,000 = 139,000

第15题：

2 The draft financial statements of Choctaw, a limited liability company, for the year ended 31 December 2004 showed

a profit of $86,400. The trial balance did not balance, and a suspense account with a credit balance of $3,310 was

included in the balance sheet.

In subsequent checking the following errors were found:

(a) Depreciation of motor vehicles at 25 per cent was calculated for the year ended 31 December 2004 on the

reducing balance basis, and should have been calculated on the straight-line basis at 25 per cent.

Relevant figures:

Cost of motor vehicles $120,000, net book value at 1 January 2004, $88,000

(b) Rent received from subletting part of the office accommodation $1,200 had been put into the petty cash box.

No receivable balance had been recognised when the rent fell due and no entries had been made in the petty

cash book or elsewhere for it. The petty cash float in the trial balance is the amount according to the records,

which is $1,200 less than the actual balance in the box.

(c) Bad debts totalling $8,400 are to be written off.

(d) The opening accrual on the motor repairs account of $3,400, representing repair bills due but not paid at

31 December 2003, had not been brought down at 1 January 2004.

(e) The cash discount totals for December 2004 had not been posted to the discount accounts in the nominal ledger.

The figures were:

$

Discount allowed 380

Discount received 290

After the necessary entries, the suspense account balanced.

Required:

Prepare journal entries, with narratives, to correct the errors found, and prepare a statement showing the

necessary adjustments to the profit.

(10 marks)

正确答案：

第16题：

13 At 1 January 2005 a company had an allowance for receivables of $18,000

At 31 December 2005 the company’s trade receivables were $458,000.

It was decided:

(a) To write off debts totalling $28,000 as irrecoverable;

(b) To adjust the allowance for receivables to the equivalent of 5% of the remaining receivables based on past

experience.

What figure should appear in the company’s income statement for the total of debts written off as irrecoverable

and the movement in the allowance for receivables for the year ended 31 December 2005?

A $49,500

B $31,500

C $32,900

D $50,900

正确答案：B
430,000 x 5% = 21,500 – 18,000 + 28,000

第17题：

2 The draft financial statements of Rampion, a limited liability company, for the year ended 31 December 2005

included the following figures:

$

Profit 684,000

Closing inventory 116,800

Trade receivables 248,000

Allowance for receivables 10,000

No adjustments have yet been made for the following matters:

(1) The company’s inventory count was carried out on 3 January 2006 leading to the figure shown above. Sales

between the close of business on 31 December 2005 and the inventory count totalled $36,000. There were no

deliveries from suppliers in that period. The company fixes selling prices to produce a 40% gross profit on sales.

The $36,000 sales were included in the sales records in January 2006.

(2) $10,000 of goods supplied on sale or return terms in December 2005 have been included as sales and

receivables. They had cost $6,000. On 10 January 2006 the customer returned the goods in good condition.

(3) Goods included in inventory at cost $18,000 were sold in January 2006 for $13,500. Selling expenses were

$500.

(4) $8,000 of trade receivables are to be written off.

(5) The allowance for receivables is to be adjusted to the equivalent of 5% of the trade receivables after allowing for

the above matters, based on past experience.

Required:

(a) Prepare a statement showing the effect of the adjustments on the company’s net profit for the year ended

31 December 2005. (5 marks)

正确答案：

第18题：

You are an audit manager responsible for providing hot reviews on selected audit clients within your firm of Chartered

Certified Accountants. You are currently reviewing the audit working papers for Pulp Co, a long standing audit client,

for the year ended 31 January 2008. The draft statement of financial position (balance sheet) of Pulp Co shows total

assets of $12 million (2007 – $11·5 million).The audit senior has made the following comment in a summary of

issues for your review:

‘Pulp Co’s statement of financial position (balance sheet) shows a receivable classified as a current asset with a value

of $25,000. The only audit evidence we have requested and obtained is a management representation stating the

following:

(1) that the amount is owed to Pulp Co from Jarvis Co,

(2) that Jarvis Co is controlled by Pulp Co’s chairman, Peter Sheffield, and

(3) that the balance is likely to be received six months after Pulp Co’s year end.

The receivable was also outstanding at the last year end when an identical management representation was provided,

and our working papers noted that because the balance was immaterial no further work was considered necessary.

No disclosure has been made in the financial statements regarding the balance. Jarvis Co is not audited by our firm

and we have verified that Pulp Co does not own any shares in Jarvis Co.’

Required:

(b) In relation to the receivable recognised on the statement of financial position (balance sheet) of Pulp Co as

at 31 January 2008:

(i) Comment on the matters you should consider. (5 marks)

正确答案：
(b) (i) Matters to consider
Materiality
The receivable represents only 0·2% (25,000/12 million x 100) of total assets so is immaterial in monetary terms.
However, the details of the transaction could make it material by nature.
The amount is outstanding from a company under the control of Pulp Co’s chairman. Readers of the financial statements
would be interested to know the details of this transaction, which currently is not disclosed. Elements of the transaction
could be subject to bias, specifically the repayment terms, which appear to be beyond normal commercial credit terms.
Paul Sheffield may have used his influence over the two companies to ‘engineer’ the transaction. Disclosure is necessary
due to the nature of the transaction, the monetary value is irrelevant.
A further matter to consider is whether this is a one-off transaction, or indicative of further transactions between the two
companies.
Relevant accounting standard
The definitions in IAS 24 must be carefully considered to establish whether this actually constitutes a related party
transaction. The standard specifically states that two entities are not necessarily related parties just because they have
a director or other member of key management in common. The audit senior states that Jarvis Co is controlled by Peter
Sheffield, who is also the chairman of Pulp Co. It seems that Peter Sheffield is in a position of control/significant influence
over the two companies (though this would have to be clarified through further audit procedures), and thus the two
companies are likely to be perceived as related.
IAS 24 requires full disclosure of the following in respect of related party transactions:
– the nature of the related party relationship,
– the amount of the transaction,
– the amount of any balances outstanding including terms and conditions, details of security offered, and the nature
of consideration to be provided in settlement,
– any allowances for receivables and associated expense.
There is currently a breach of IAS 24 as no disclosure has been made in the notes to the financial statements. If not
amended, the audit opinion on the financial statements should be qualified with an ‘except for’ disagreement. In
addition, if practicable, the auditor’s report should include the information that would have been included in the financial
statements had the requirements of IAS 24 been adhered to.
Valuation and classification of the receivable
A receivable should only be recognised if it will give rise to future economic benefit, i.e. a future cash inflow. It appears
that the receivable is long outstanding – if the amount is unlikely to be recovered then it should be written off as a bad
debt and the associated expense recognised. It is possible that assets and profits are overstated.
Although a representation has been received indicating that the amount will be paid to Pulp Co, the auditor should be
sceptical of this claim given that the same representation was given last year, and the amount was not subsequently
recovered. The $25,000 could be recoverable in the long term, in which case the receivable should be reclassified as
a non-current asset. The amount advanced to Jarvis Co could effectively be an investment rather than a short term
receivable. Correct classification on the statement of financial position (balance sheet) is crucial for the financial
statements to properly show the liquidity position of the company at the year end.
Tutorial note: Digressions into management imposing a limitation in scope by withholding evidence are irrelevant in this
case, as the scenario states that the only evidence that the auditors have asked for is a management representation.
There is no indication in the scenario that the auditors have asked for, and been refused any evidence.

第19题：

Government securities would appear on a commercial bank's balance sheet as ______.

A．an asset

B．reserves

C．part of net worth

D．a liability

正确答案：A
解析：商业银行持有政府债券是其资产，因此在资产负债表上体现为资产。asset资产。reserves准备金。net worth (NW) 净值。liability负债。balance sheet，资产负债表。

第20题：

What does an asset mean on the balance sheet?

A．It means all the assets recorded in a period of time.

B．It means the sum of all the individual asset amounts added over time.

C．It means the individual dollar amount.

D．It means accounting information expressed in special terms.

正确答案：B
解析：文章第二段提到The business records all assets…individual dollar amounts added over time．资产在资产负债表上通常以单个资产的总和来呈现。

第21题：

What is the short-coming of the concept?

A．The accountant has to restate the assets and liabilities on the balance sheet.

B．It is difficult to compare the balance sheets of different companies.

C．The balance sheet can not reflect the precise worth of the assets and liabilities.

D．Another company will not decide whether to buy the piece of land.

正确答案：C
解析：文章最后一段提到Suppose another company paid…a much higher amount for the land．如果是基于这样一个观点的话，这样一个资产负债表所反映的内容就要比实物要高出很多，由此可知这一观点的缺点在于，资产负债表不能精确的反映资产和负债的实际情况。

第22题：

Balance sheet

正确答案: 资产负债表（the Balance Sheet）亦称财务状况表，表示企业在一定日期（通常为各会计期末）的财务状况（即资产、负债和业主权益的状况）的主要会计报表。

第23题：

名词解释题

Balance sheet

正确答案：资产负债表（the Balance Sheet）亦称财务状况表，表示企业在一定日期（通常为各会计期末）的财务状况（即资产、负债和业主权益的状况）的主要会计报表。

解析：暂无解析

24 What figure should appear in the consolidated balance sheet of the J group as at 31 December 2004 for minorityinterest?A $32,000B $16,000C $10,000D $24,000

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