Cannot replaced and generate negative net cash flows self-generating

1. $6 926 387

2. $8 000 000

1. Bona Bay Ltd is a large manufacturer of surfboards and provides a two year warranty for all its products from the time of purchase by offering to repair or replace the item.

2. Sea Eagle Ltd operates its offshore oil rigs near Curlew Beach. During the reporting period, there was a major oil spill and the company had publicly announced to undertake clean-up of all the contamination that it caused. There is no environmental legislation on oil spills.

2. I and II

3. II and III

2. wine

3. vines

2. Managers of heritage assets need to ensure that they maximise the value of the collections and maintain them appropriately. Valuations of all assets provide an accurate performance measure in this regard.

3. In order to assess whether or not managers of collections have performed well it is necessary to have financial valuations of the heritage assets held at the beginning and end of the period. Decisions to buy and sell heritage assets can then be evaluated in the context of their impact on the quality of the entire collection.

2. a)Dr. Cash trust 5,000,000
   Cr. Application-debentures 5,000,000
   Dr. Cash at bank 5,000,000
   Cr. Cash trust 5,000,000
   b)Dr. Cash at bank 200,000
   Cr.Interest 200,000
   c)Dr.Debentures5,000,000
   Cr.Cash at bank 5,000,000

3. a)Dr. Cash trust 5,000,000
   Cr. Application-debentures 5,000,000
   Dr. Cash at bank 5,000,000
   Cr. Cash trust 5,000,000
   Dr. Application-debentures 5,000,000
   Cr.Debentures 5,000,000
   b)Dr.Interest expense 200,000
   Cr.Cash at bank 200,000
   c)Dr.Debentures 5,000,000
   Cr.Cash at bank 5,000,000

2. The cost of heritage assets is the most reliable measure, but because heritage assets may be very old their carrying value will often be zero under the requirements of AAS 29.

3. Obtaining a reliable valuation for heritage assets is problematic because there will generally be no sales or purchases and no valid market comparison to use.

2. Contingent liabilities are required to be disclosed in the notes to the financial statement when the amount of the obligation cannot be measured with sufficient reliability.

3. Material contingent liabilities only are required to be recognised in the financial statements under AASB 137.

2. is a requirement of AAS 29 which appears to be based on the assumption that only financial information is relevant to report users.

3. will result in wasted resources if demand for such information is limited.

2. have no alternative use, cannot be replaced and generate negative net cash flows.

3. are self-generating, individually unique and generate negative net cash flows.

2. the value of the package of assets for which an active market exists should be used to assist in determining the fair value of the biological assets.

3. the fair values of the non-biological assets should be subtracted from the package value.

2. will be classified as debt or equity based on their legal form rather than the substance of the financial instrument.

3. exhibit the characteristics of equity when they are non-redeemable.

2. a legally binding contractual arrangement between two parties: the entity and another party.

3. the involvement of two separate parties—the entity and another party—of which the identity of the latter needs not necessarily to be known.

2. a replacement and/or market-value basis.

3. using net present values.

2. Additional debt may lead to a technical breach of a firm's contractual agreements with existing debt-holders and lead to the possible wind-up of the business or the need to renegotiate the contract.

3. The level of recognised debt will affect the profitability of the business.

2. Settlement of a legal case where the company is likely to be held liable for damages in court.

3. Best estimate of likely claims for warranty by customers.

2. recoverable amount.

3. current replacement cost.

2. (a) 80%; (b) 60%

3. (a) 50%; (b) 67%

2. There is a legal or constructive obligation to make a future sacrifice of economic benefits within the entity as a result of past transactions or other past events, the amount or timing of which is uncertain.

3. The entity has a present legal obligation to make a future sacrifice of economic benefits to other entities as a result of past transactions or other past events; and the amount or timing of the future sacrifice of economic benefits that will be made to satisfy the present obligation is uncertain.

1. ($350 000)

2. ($300 000)

What is the net profit of Nerang Orange Farms Ltd for the year ending 30 June 2013 to conform with the provisions of AASB 141 Agriculture?

1. $60 000

Methods that have been used to provide a valuation of heritage assets include:

1. contingent-valuation method and the nominal or notional value.

Question 1

The period covered by AASB 110 Events After the Reporting Period is from:

Question 2

AASB 110 requires that adjusting events that meet two broad criteria should be:

Question 3

Birong Ltd. issued a $200 million preference share issue after reporting date. What is the classification of this subsequent event and what is the accounting treatment prescribed in AASB 110?

Question 4

Which of the following is not a related party within the provisions of AASB 124 Related Party Disclosures?

Question 5

Which of the following items is not an example of items reportable under other comprehensive income?

Question 6

'Comprehensive income' refers to:

Question 7

Reasons for the requirement to disclose related-party transactions include:

Question 8

Which of the following would not be considered a 'prior period error' according to AASB 108?

Question 9

Cobourg Ltd has the following transactions during the year:

4. I, II, IV and VI

Question 10

4. destruction of assets due to flood after the reporting date