In the year ended 31 December 20X7, FG leased a piece of machinery. The accountant of FG had prepared the financial statements for the year to 31 December 20X7 on the basis of the lease being an operating lease.
However, following the end of year audit it has been agreed that the machinery is in fact held under a finance lease and therefore the financial statements need to be corrected.
The correction will have which THREE of the following affects on the financial statements?

• A.Non-current liabilities will decrease.
• B.Non-current assets will increase.
• C.Current liabilities will increase.
• D.Depreciation costs will decrease.
• E.Non-current assets will decrease.
• F.Finance costs will increase.

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ST granted 1,000 share appreciation rights (SARs) to its 100 employees on 1 December 20X7. To be eligible, employees must remain employed for 3 years from the grant date. In the year to 30 November
20X8, 10 staff left and a further 20 were expected to leave over the following two years. The fair value of each SAR was $12 at 1 December 20X7 and $15 at 30 November 20X8.
What is the accounting entry to record this transaction for the year to 30 November 20X8?

• A.Dr Staff costs $280,000, Cr Equity $280,000
• B.Dr Staff costs $350,000, Cr Equity $350,000
• C.Dr Staff costs $280,000, Cr Non-current liabilities $280,000
• D.Dr Staff costs $350,000, Cr Non-current liabilities $350,000

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In recent years EBITDA has been adopted by large entities as a key measure of performance. The following figures have been extracted from the financial statements of UV for the year ended 30 November 20X9:

What is EBITDA for UV for the year ended 30 November 20X9?
Give your answer to the nearest $'000.

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Calculate the value of non controlling interest that will be presented in KL's consolidated statement of financial position at 31 December 20X9?
Give your answer to the nearest whole $'000.
$ ? 000

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AB and EF are located in the same country and prepare their financial statements to 31 October in accordance with International Accounting Standards. EF supplies AB with a component that is vital to AB's product range. AB is considering acquiring a controlling interest in EF by 31 December 20X4 in order to guarantee future supply. The Board of EF has indicated that such an approach would be postively considered. AB would use its control to make AB the sole customer of EF.
The Finance Director of AB has been granted access to EF's management accounts and has conducted some initial analysis from the financial press. The results togther with comparisons for AB for the year to
31 October 20X4 are presented below:

AB and EF are forecasting revenues of S1,500,000 and $700,000 respectively for the year ended 31 October 20X5.
Which of the following independent options would explain the difference between the gearing ratios of AB and EF at 31 October 20X4?

• A.EF has a policy of revaluing non current assets whereas AB does not.
• B.EF made a bonus issue of shares from retained earnings during the year whereas AB did not.
• C.EF's market value of shares at 31 October 20X4 is lower than that of AB.
• D.EF's average cost of borrowing is significantly lower than that of AB and EF has taken advantage of that.

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