In The Name Of Allah The Most Beneficient & Mercifull
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IN THE NAME OF ALLAH THE MOST BENEFICIENT & MERCIFULL
If one does not know to which port is sailing , no wind is favorable .
DAY - 5 SESSION - 13
IAS – 21 FOREIGN CURRENCY TRANSACTIONS
DEFINITIONS
INDIVIDUAL TRANSACTIONS IN FOREIGN CURRENCY
TRANSLATION OF FOREIGN CURRENCY INTO FUNCTIONAL CURRENCY
AT SUBSEQUENT BALANCE SHEET DATE
FO R E IG N C U R R E N C Y C O N V E R S IO N INDIRECT QUOTE Rs. 60 - 61/$1 Multiply with relevant rate
DIRECT QUOTE $0.017 – 0.020/Re.1 Divide with relevant rate
Buying
2nd Rate
1st Rate
Selling
1st Rate
2nd Rate
CLASS PRACTICE QUESTION
(a)
Aston plc has a year end of 31 December 20X1. On 25 October 20X7 Aston plc buys goods from a japans’ supplier for JY286,000.
On 16 November 20X7 Aston plc pays the Japanese supplier in full. The goods remain in stock at the year end. Exchange rates 25 October 20X7
Re1 = JY 11.16
16 November 20X7
Re1 = JY 10.87
31 December 20X7
Re1 = JY 11.02
Show the accounting entries for these transactions.
(b)
On 15 March a company purchases a non-current asset on one month’s credit for JY 20,000.
Exchange rates 15 MARCH
JY 5
=
Re.1
31 MARCH
JY 4
= Re. 1
Required: Explain and illustrate how the transaction is recorded and dealt with given a financial year end of 31 March
.
Example: The following transactions were undertaken by Jeyesplc in the accounting year ended 31 December 20X7.
Exchange rates
JY : Re
1 January 20X7
2.0 : 1
31 March 20X7
2.3 : 1
30 June 20X7
2.1 : 1
30 September 20X7
2.0 : 1
30 November 20X7
1.8 : 1
31 December 20X7
1.9 : 1
Date
Narrative
Amount JY
1 January 20X7
Purchase of a non-current asset
31 March 20X7
Payment for the non-current asset 100,000
100,000
Purchases on credit
50,000
30 June 20X7
Sales on credit
95,000
30 September 20X7
Payment for purchases
50,000
30 November 20X7
Long-term loan taken out
Required: Prepare journal entries to record the above transactions.
200,000
Examination Question – Nov 2005
Why do accountants get excited on Saturdays? They can wear casual clothes to work
ALL THE BEST & GOOD LUCK
IN THE NAME OF ALLAH THE MOST BENEFICIENT & MERCIFULL
Good better unless
thoughts are no than good dreams , they be executed .
DAY - 5 SESSION 11
IAS – 12 TAXES
Accounting Profit or Loss
Taxable Profit or Loss
Tax Expense
Current Tax
Deferred Tax Liability
Deferred Tax Asset
Temporary Differences
Types of Temporary Differences
Taxable Temporary Differences
Deductible Temporary Differences
Tax Base
Calculation of Income Tax Expense Rs.
Current Tax for the year
xxx
Add/Less: Under or over provision of income tax of the previous year
xxx
Add/Less: Increase or decrease in deferred xxx tax xxx
B a la n ce S h e e t Ite m Rs. Non-current liabilities
Deferred tax (closing balance)
xx
Current liabilities
Current Tax payable (estimate for the year)
xx
Journal Entries Date
Description Tax Expense (I/S) Income Tax Liability (B/S) (Current tax expense for the year)
L/F Debit
Credit
xxx xxx
Journal Entries Date
Description Tax Expense(I/S) Deferred Tax Liability (B/S) (Increase in Deferred Tax for the year)
L/F Debit
Credit
xxx xxx
Journal Entries Date
Description Deferred Tax Liability (B/S) Tax Expense(I/S) (Decrease in Deferred Tax for the year)
L/F Debit
Credit
xxx xxx
Ta x E xp e n se le d g e r Date
Description J/F Amount Date $ 1/1/07 Cash (Tax paid during the year)
xxx
Deferred Tax (Increase in deferred tax)
31/12/07
Description J/F Amount $ Balance b/d
xxx
Deferred Tax (Decrease in Deferred Tax)
xxx
Income Statement Expenses
xxx
Balance c/d
xxx
xxx
Deferred Tax ledger Date
Description J/F Amount Date $ 1/1/07 Tax Expense (Decrease in deferred tax)
31/12/07
xxx
Description J/F Amount $ Balance b/d
xxx
Tax Expense (Increase in Deferred Tax)
xxx
Balance c/d
xxx
xxx
Disclosures
Example Tree is an incorporated listed company. of the trial balance at 31 March 20X6:
The following is an extract
Rs.000
Rs.000
Tax paid (note 1)
850
Deferred income tax
5,000
The following information is relevant: (1) The balance on the taxation account of Rs.850,000 in the list of account balances represents the tax provision for the year to 31 March 20X5 of Rs.9,350,000 finally settled on 31 December 20X5 for Rs.8,500,000. The provision for income tax for the year to 31 March 20X6 is estimated at Rs.10 (2)
The tax rate is 25%.
million.
Temporary differences at 31 March 20X6 were: Accelerated Other temporary tax depreciation differences
Rs.000 18,400 (4,400)
Required: Prepare the extract of the income statement for Tree for the year to 31 March 20X6, and the balance sheet as at 31 March 20X6.
What does CMA stand for? Can't Manage Anything
ALL THE BEST & GOOD LUCK
IN THE NAME OF ALLAH THE MOST BENEFICIENT & MERCIFULL
The world makes way for the man who knows where he is going .
DAY - 5 SESSION - 11
IAS – 33 EARNING PER SHARE (EPS)
BASIC EPS
EFFECT ON EPS OF BONUS ISSUE
WEIGHTED AVERAGE NUMBER OF ORDINARY Total number SHARES of shares at the start of the xxx year shares issued at any time of the year xxx Bonus Total Weighted average number of xxx ordinary shares
EFFECT ON EPS OF RIGHT ISSUE AT FULL MARKET PRICE
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES Total number of shares at the start of the xxx year issue during the year the year Right (XX) x xxx 6/12 Total Weighted average number of xxx ordinary shares
EFFECT ON EPS OF RIGHT ISSUE AT LESS THAN MARKET PRICE
WEIGHTED AVERAGE NUMBER OF ORDINARY Total SHARES numberof shares at the start of the year Bonus xxx (X) issue during the year the year at less than (XX) Fraction Right x 6/12 xxx marketWeighted price average number of ordinary Total xxx shares
BONUS FRACTION
Theoratical Ex-Right Price Number & value of shares before right issue Number & Value of Right issue Total Number & value after right issue
No xxx xxx xxx
Rs. xxx xxx xxx
DILUTED EPS
D ILU T E D E P S
Why was a cost accountant so excited that he completed a jigsaw puzzle in only 59 weeks? Because on the box it said 8-12 Years.
ALL THE BEST & GOOD LUCK
If one does not know to which port is sailing , no wind is favorable .
DAY - 5 SESSION - 13
IAS – 21 FOREIGN CURRENCY TRANSACTIONS
DEFINITIONS
INDIVIDUAL TRANSACTIONS IN FOREIGN CURRENCY
TRANSLATION OF FOREIGN CURRENCY INTO FUNCTIONAL CURRENCY
AT SUBSEQUENT BALANCE SHEET DATE
FO R E IG N C U R R E N C Y C O N V E R S IO N INDIRECT QUOTE Rs. 60 - 61/$1 Multiply with relevant rate
DIRECT QUOTE $0.017 – 0.020/Re.1 Divide with relevant rate
Buying
2nd Rate
1st Rate
Selling
1st Rate
2nd Rate
CLASS PRACTICE QUESTION
(a)
Aston plc has a year end of 31 December 20X1. On 25 October 20X7 Aston plc buys goods from a japans’ supplier for JY286,000.
On 16 November 20X7 Aston plc pays the Japanese supplier in full. The goods remain in stock at the year end. Exchange rates 25 October 20X7
Re1 = JY 11.16
16 November 20X7
Re1 = JY 10.87
31 December 20X7
Re1 = JY 11.02
Show the accounting entries for these transactions.
(b)
On 15 March a company purchases a non-current asset on one month’s credit for JY 20,000.
Exchange rates 15 MARCH
JY 5
=
Re.1
31 MARCH
JY 4
= Re. 1
Required: Explain and illustrate how the transaction is recorded and dealt with given a financial year end of 31 March
.
Example: The following transactions were undertaken by Jeyesplc in the accounting year ended 31 December 20X7.
Exchange rates
JY : Re
1 January 20X7
2.0 : 1
31 March 20X7
2.3 : 1
30 June 20X7
2.1 : 1
30 September 20X7
2.0 : 1
30 November 20X7
1.8 : 1
31 December 20X7
1.9 : 1
Date
Narrative
Amount JY
1 January 20X7
Purchase of a non-current asset
31 March 20X7
Payment for the non-current asset 100,000
100,000
Purchases on credit
50,000
30 June 20X7
Sales on credit
95,000
30 September 20X7
Payment for purchases
50,000
30 November 20X7
Long-term loan taken out
Required: Prepare journal entries to record the above transactions.
200,000
Examination Question – Nov 2005
Why do accountants get excited on Saturdays? They can wear casual clothes to work
ALL THE BEST & GOOD LUCK
IN THE NAME OF ALLAH THE MOST BENEFICIENT & MERCIFULL
Good better unless
thoughts are no than good dreams , they be executed .
DAY - 5 SESSION 11
IAS – 12 TAXES
Accounting Profit or Loss
Taxable Profit or Loss
Tax Expense
Current Tax
Deferred Tax Liability
Deferred Tax Asset
Temporary Differences
Types of Temporary Differences
Taxable Temporary Differences
Deductible Temporary Differences
Tax Base
Calculation of Income Tax Expense Rs.
Current Tax for the year
xxx
Add/Less: Under or over provision of income tax of the previous year
xxx
Add/Less: Increase or decrease in deferred xxx tax xxx
B a la n ce S h e e t Ite m Rs. Non-current liabilities
Deferred tax (closing balance)
xx
Current liabilities
Current Tax payable (estimate for the year)
xx
Journal Entries Date
Description Tax Expense (I/S) Income Tax Liability (B/S) (Current tax expense for the year)
L/F Debit
Credit
xxx xxx
Journal Entries Date
Description Tax Expense(I/S) Deferred Tax Liability (B/S) (Increase in Deferred Tax for the year)
L/F Debit
Credit
xxx xxx
Journal Entries Date
Description Deferred Tax Liability (B/S) Tax Expense(I/S) (Decrease in Deferred Tax for the year)
L/F Debit
Credit
xxx xxx
Ta x E xp e n se le d g e r Date
Description J/F Amount Date $ 1/1/07 Cash (Tax paid during the year)
xxx
Deferred Tax (Increase in deferred tax)
31/12/07
Description J/F Amount $ Balance b/d
xxx
Deferred Tax (Decrease in Deferred Tax)
xxx
Income Statement Expenses
xxx
Balance c/d
xxx
xxx
Deferred Tax ledger Date
Description J/F Amount Date $ 1/1/07 Tax Expense (Decrease in deferred tax)
31/12/07
xxx
Description J/F Amount $ Balance b/d
xxx
Tax Expense (Increase in Deferred Tax)
xxx
Balance c/d
xxx
xxx
Disclosures
Example Tree is an incorporated listed company. of the trial balance at 31 March 20X6:
The following is an extract
Rs.000
Rs.000
Tax paid (note 1)
850
Deferred income tax
5,000
The following information is relevant: (1) The balance on the taxation account of Rs.850,000 in the list of account balances represents the tax provision for the year to 31 March 20X5 of Rs.9,350,000 finally settled on 31 December 20X5 for Rs.8,500,000. The provision for income tax for the year to 31 March 20X6 is estimated at Rs.10 (2)
The tax rate is 25%.
million.
Temporary differences at 31 March 20X6 were: Accelerated Other temporary tax depreciation differences
Rs.000 18,400 (4,400)
Required: Prepare the extract of the income statement for Tree for the year to 31 March 20X6, and the balance sheet as at 31 March 20X6.
What does CMA stand for? Can't Manage Anything
ALL THE BEST & GOOD LUCK
IN THE NAME OF ALLAH THE MOST BENEFICIENT & MERCIFULL
The world makes way for the man who knows where he is going .
DAY - 5 SESSION - 11
IAS – 33 EARNING PER SHARE (EPS)
BASIC EPS
EFFECT ON EPS OF BONUS ISSUE
WEIGHTED AVERAGE NUMBER OF ORDINARY Total number SHARES of shares at the start of the xxx year shares issued at any time of the year xxx Bonus Total Weighted average number of xxx ordinary shares
EFFECT ON EPS OF RIGHT ISSUE AT FULL MARKET PRICE
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES Total number of shares at the start of the xxx year issue during the year the year Right (XX) x xxx 6/12 Total Weighted average number of xxx ordinary shares
EFFECT ON EPS OF RIGHT ISSUE AT LESS THAN MARKET PRICE
WEIGHTED AVERAGE NUMBER OF ORDINARY Total SHARES numberof shares at the start of the year Bonus xxx (X) issue during the year the year at less than (XX) Fraction Right x 6/12 xxx marketWeighted price average number of ordinary Total xxx shares
BONUS FRACTION
Theoratical Ex-Right Price Number & value of shares before right issue Number & Value of Right issue Total Number & value after right issue
No xxx xxx xxx
Rs. xxx xxx xxx
DILUTED EPS
D ILU T E D E P S
Why was a cost accountant so excited that he completed a jigsaw puzzle in only 59 weeks? Because on the box it said 8-12 Years.
ALL THE BEST & GOOD LUCK
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