Home Insert 公, A 四,出,…,eyy A A Q Aa AABBCCI AaBbCcDc AaBb CcD - b 17 - Normal... Strong WPSOffi... A 2- A A 三1 1 2. You are the financial controller of Omega, a listed entity which prepares consolidated financial statements in accordance with International Finan cial Reporting Standards (IFRS). The chief executive officer (CEO) of Omega has reviewed the draft consolidated financial statements of the Omega group and of a number of the key subsidiary companies for the year ended 31 March 2018. None of the subsidiaries are listed entities but all prepare their financial statements in accordance with IFRS. The CEO has sent you an email with the following queries: Query one When I read the disclosure note relating to intangible non-current assets in the consolidated financial statements, I notice that this figure includes brand names associated with subsidiaries which we 've acquired in recent years. Howe ver. the brand names which are associated directly with products sold by Omega (the parent entity) are not included within the non-current assets figure. This is another inconsistency that I don't understand. Please explain how this practice can be in line with IFRS requirements. Would I be right in thinking that, as with property. plant and equipment, we can use the fair value model to measure intangible assets? Query Two When reading the accounting policies note in the consolidated financial statements I notice that we measure all of our freehold properties using a fair value model but that we measure our plant and equipment using a cost model. I further notice that both ofthese asset types are shown in the 'property, plant and equipment figure which is a single component of non- current assets in the consolidated statement offinancial position. It makes no sense to me that assets which are shown as property, plant and equipment are measured inconsistently. If it's OK to measure different parts of oro perty, plant and equipment using two different measurement models, why not use the fair value model forthe more readily accessible properties and use the cost model for the properties in remote locations to save on time and cost? Required: Provide answers to these queries raised by the CEO. Your answers should refer to relevant provisions of IFRS.

Home Insert 公, A 四,出,…,eyy A A Q Aa AABBCCI AaBbCcDc AaBb CcD - b 17 - Normal... Strong WPSOffi... A 2- A A 三1 1 2. You are the financial controller of Omega, a listed entity which prepares consolidated financial statements in accordance with International Finan cial Reporting Standards (IFRS). The chief executive officer (CEO) of Omega has reviewed the draft consolidated financial statements of the Omega group and of a number of the key subsidiary companies for the year ended 31 March 2018. None of the subsidiaries are listed entities but all prepare their financial statements in accordance with IFRS. The CEO has sent you an email with the following queries: Query one When I read the disclosure note relating to intangible non-current assets in the consolidated financial statements, I notice that this figure includes brand names associated with subsidiaries which we 've acquired in recent years. Howe ver. the brand names which are associated directly with products sold by Omega (the parent entity) are not included within the non-current assets figure. This is another inconsistency that I don't understand. Please explain how this practice can be in line with IFRS requirements. Would I be right in thinking that, as with property. plant and equipment, we can use the fair value model to measure intangible assets? Query Two When reading the accounting policies note in the consolidated financial statements I notice that we measure all of our freehold properties using a fair value model but that we measure our plant and equipment using a cost model. I further notice that both ofthese asset types are shown in the 'property, plant and equipment figure which is a single component of non- current assets in the consolidated statement offinancial position. It makes no sense to me that assets which are shown as property, plant and equipment are measured inconsistently. If it's OK to measure different parts of oro perty, plant and equipment using two different measurement models, why not use the fair value model forthe more readily accessible properties and use the cost model for the properties in remote locations to save on time and cost? Required: Provide answers to these queries raised by the CEO. Your answers should refer to relevant provisions of IFRS.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Transcribed Image Text:Home Insert 公, A 四,出,…,eyy A A Q Aa AABBCCI AaBbCcDc AaBb CcD - b 17 - Normal... Strong WPSOffi... A 2- A A 三1 1 2. You are the financial controller of Omega, a listed entity which prepares consolidated financial statements in accordance with International Finan cial Reporting Standards (IFRS). The chief executive officer (CEO) of Omega has reviewed the draft consolidated financial statements of the Omega group and of a number of the key subsidiary companies for the year ended 31 March 2018. None of the subsidiaries are listed entities but all prepare their financial statements in accordance with IFRS. The CEO has sent you an email with the following queries: Query one When I read the disclosure note relating to intangible non-current assets in the consolidated financial statements, I notice that this figure includes brand names associated with subsidiaries which we 've acquired in recent years. Howe ver. the brand names which are associated directly with products sold by Omega (the parent entity) are not included within the non-current assets figure. This is another inconsistency that I don't understand. Please explain how this practice can be in line with IFRS requirements. Would I be right in thinking that, as with property. plant and equipment, we can use the fair value model to measure intangible assets? Query Two When reading the accounting policies note in the consolidated financial statements I notice that we measure all of our freehold properties using a fair value model but that we measure our plant and equipment using a cost model. I further notice that both ofthese asset types are shown in the 'property, plant and equipment figure which is a single component of non- current assets in the consolidated statement offinancial position. It makes no sense to me that assets which are shown as property, plant and equipment are measured inconsistently. If it's OK to measure different parts of oro perty, plant and equipment using two different measurement models, why not use the fair value model forthe more readily accessible properties and use the cost model for the properties in remote locations to save on time and cost? Required: Provide answers to these queries raised by the CEO. Your answers should refer to relevant provisions of IFRS.

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