Examiner’s report – FR March/June 2021
9
Section B
Section B tests candidates’ knowledge on a number of IFRS Standards in more depth
than
section A, with three case questions containing five two-mark objective test
questions.
We have selected one of the cases that examined IAS 38 Intangible Assets. You
should note a case will be a mixture of narrative and calculation
questions and can
also include different styles of OT questions similar to those used in section A.
Candidates should also read the case scenario and its requirements carefully. As
these questions score either 2 marks or zero marks, it is important that candidates do
not misread or miss any information in the scenario. Close reading of the
requirements is also important to identify any specific instructions such as rounding.
Section B – Scenario
Wilrob Co has the following research projects at 31 March 20X7:
Project 324 – The project commenced on 1 April 20X6 and
incurred total costs
of $15m during the period to 31 December 20X6 on a pro-rata basis. On 30 June
20X6, the directors were confident that the project met the capitalisation
criteria
of IAS 38 Intangible Assets. The project was completed
and began to generate
revenue from 1 January 20X7. It is estimated that the project will generate
revenue for five years.
Project 325 – The project commenced on 1 September 20X6. Costs of $20,000
per month were incurred until 31 January 20X7
when the project was
abandoned. The specialist equipment that had been purchased for Project 325
was transferred for use in another of Wilrob Co's research projects.
Project 326 – The project commenced on 1 January 20X7. Costs of $40,000 per
month were incurred until 31 August 20X7 when
the directors increased the
spend to $60,000 to complete the project quickly as a potential buyer had been
identified on 20 July 20X7. The directors had not been
confident of the success
of the project until this point.
Examiner’s report – FR March/June 2021
10
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