Waching daily Sep 2 2017

So, explain how we should account - here it says two types of issues but we just got one

issue here, so explain how we should account for this issue. So our year ended

30 September. At the start of the year, we have a property in our accounts of 3.5

and we sold it for 5, therefore profit on sale 1.5

all so far so good. And it says part of the terms of the

sale is that we will rent the property back for a period of 5 years. So the

question is then if we rent it back, so we've put Laidlaw rent it back. The question is

is it a sale in substance. Remember there is always substance over form. Okay, so let's

see if we have really sold it then. We're gonna rent it back at annual rental of

four hundred thousand, okay, at the end of this period the property will company

will sell it at it's fair value, which is supposed to be 6.5 million

and we'll be given the opportunity to purchase it back at its fair value. So

everything here is at fair value.We can or Laidlaw can rent it at fair value. And

buy it back at fair value. But that's just like any normal thing we can always

buy a property with regardless of who we are, we could always buy at fair value

so no effect on the substance then. So in fact everything seems okay so the

treatment is correct! They have actually solved it in substance

for five million we and then we just put the rentals to the income statement as

an operating lease as a normal. Okay there's nothing strange going on here

that suggests we haven't really sold the property because everything's at

fair value, everything is normal.

For more infomation >> ACCA F7 Past Paper Exam Question: Faithful representation (Video 7) - Duration: 2:35.

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ACCA F7 Full Video Lectures: Enhancing characteristics & Good information (Video 9) - Duration: 2:38.

So in the last video we talked about fundamental characteristics of good

information. Faithful representation, relevance. Useless without them.

Now we'll look at the enhancing characteristics of good information

where things are just less useful without these and they are Comparable,

Verifiable, Timely and Understandable. Let's go through those individually then.

Comparable - think of things like an accounting policy. If you change

your accounting policy what you must also change is your comparative last

year, mustn't you. You change your comparative last year so then it also

equals the current year. You can see any trends so

comparability is good for trend analysis. So an accounting policy change

is a good example of it. We change it this year in the current year and then we

go back and we pretend it happened last year. We change the comparative as well

so that it is comparable so that allows us to do trend analysis. Verifiable, that

just means that independent users would agree on how we've treated the item,

ensure that it is faithfully represented. Timely enough, in time for users

to make decisions. No that I've given the information really late a lot less

useful then. And understandable that just means that the account should be clear

and concise. That doesn't mean no complex information, you still include

complex information, you just don't try to make it seem even more complex. If

it's complex its complex but try to keep it clear and concise, include

complex information. How do you do this? Well you do this by doing things like

categorising, don't we, so if you think of the income statement we don't write

every expense out, we help categorise them, we use materiality, we would put things in

according to their character, assets, liabilities etc. And also one thing worth

knowing is, we do expect that users have a

reasonable FR knowledge, so we don't have to explain depreciation to them etc.

We do expect they've got a reasonable knowledge those who are reading the

accounts. OK, so that is that! They're the qualities of good information

For more infomation >> ACCA F7 Full Video Lectures: Enhancing characteristics & Good information (Video 9) - Duration: 2:38.

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Hello Kitty Toys Jumping on the Bed🎵 Music video with Five Little Monkeys Song for kids - Duration: 1:37.

Five little monkeys

jumping on the bed

One fell off

and bumped his head

Mama called the doctor

And the doctor said

No more monkeys

jumping on the bed

Four little monkeys

jumping on the bed

One fell off

and bumped his head

Mama called the doctor

And the doctor said

No more monkeys

jumping on the bed

Three little monkeys

jumping on the bed

One fell off

and bumped his head

Mama called the doctor

And the doctor said

No more monkeys

jumping on the bed

Two little monkeys

jumping on the bed

One fell off

and bumped his head

Mama called the doctor

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No more monkeys

jumping on the bed

One little monkey

jumping on the bed

One fell off

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Mama called the doctor

And the doctor said

Put those monkeys

back to bed

For more infomation >> Hello Kitty Toys Jumping on the Bed🎵 Music video with Five Little Monkeys Song for kids - Duration: 1:37.

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Afternoon Video Forecast - Duration: 0:54.

For more infomation >> Afternoon Video Forecast - Duration: 0:54.

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ACCA F7 : Full Video Lecture: The Conceptual framework and Relevance (Video 8) - Duration: 0:28.

Don't forget we said TWO fundamental characteristics, faithful

representation and of course relevance. Relevance is something to be

relevant to a user, it has to have either a confirmatory value or a predictive

value. We gave the example, didn't we, of the discontinued operations

that would help us predict the future because we know it's not gonna carry

on.

For more infomation >> ACCA F7 : Full Video Lecture: The Conceptual framework and Relevance (Video 8) - Duration: 0:28.

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Người Tình Hờ - SuMin |Video Lyrics - Duration: 3:43.

For more infomation >> Người Tình Hờ - SuMin |Video Lyrics - Duration: 3:43.

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ACCA F7 Exam Question: Faithful representation within the IASB's Conceptual Framework (Video 6) - Duration: 5:10.

So this is all about faithful representation so let's have a quick

chat about faithful representation. What we mean here is, it's the substance, it's

the substance being more important in the

form. Form meaning the legal situation so the whole idea of substance is, it

represents is the word they use. It represents the true economic phenomenon.

Now I'm going to give you a quick example of this where it's better to go

for the true economic phenomena but let's go for the substance than the

actual legal situation. So let me give you an example. You sell some goods

to a bank for 400 and there's a sales invoice etc so legally / form wise that's

the same, isn't it, you've got a sales invoice, done! But actually

there's an agreement to buy it back for 500 in one year's time and if you think

about the true economic phenomena, there's true substance of what's going

on here, we are going to receive 400

from a bank. We are going to pay back

500 in one year and if you look at as a whole, in substance I'm

hoping you can see that 400 is just a loan a one-year loan.

Why we paid back 500, well 100 needs to go to interest paid

that is the substance, that is how you show it. Not the legal form of just a

sale and then the legal form of 500 being a purchase later

that's not what's happened. The true economic phenomena is that it's a loan. So

you always go for that so you never go for the legal situation you always go

for the true substance which means the companies can't try and be too clever

because you should always show the principle of what's happening. And that's

what this question is asking, it says, which of the following then correctly

applies this principle of faithful representation. So let's have a look at

it. Part A or first bit. Reporting the transaction based on it's legal status

rather than it's economic substance. Well no, that's the opposite isn't it. We're

saying that you should show the true economic substance you should show the

true economic phenomena not the legal status. And doing that is

definitely wrong. That's the whole point of faithful representation is do it the

other way around. Excluding the subs and not consolidating a subsidiary

just because its activities are different from the group. Well no, that's

not substance over form at all. Recording the whole of the net proceeds so all of

the loan or the whole of the net proceeds from the issue of a loan which

potentially could go to equity shown it all as debts. Well no because some of it

could go to equity the best thing to do on this convertible loan you always show

a convertible loan as mainly debt but a little bit of equity too because it might

get converted, that's the substance of it. So no, showing it all as a debt that's

wrong so the answer must be "D" allocating part of the sales proceeds of a motor

vehicle to interest received even though it was sold with interest free finance.

That is true because if you go to a shop and you see a car available for 10,000

and you can get zero percent interest on it for two years well

somebody's paying for that interest somewhere and what's really happening is

that the car is probably worth 12,000 cars, it's probably worth

8,000 and 2,000 of that would be they're giving you

interest for the next four years so the car is only worth 8,000

so you'd put 8,000 to the sale of the car and 2000 interest receipt. Not

just putting the whole 10,000 to a car because even though it looks like you're

getting a bargain, you are not. Somebody, somewhere is paying for the interest so

the car itself must be worth less. So just have a read at that again

allocating part of the sales proceeds of a motor vehicle to interest received, yes

instead of putting the whole 10,000 in, put 2,000 of it to interest received even

though there is always 0% yet that's why you've put in some to interest received

you have to make up a figure , based on what the market interest is. Somebody,

somewhere is paying for it. Okay, so the answer is D!