ACCA FR — Financial Reporting Practice Exam 6

Section A

AgriTech Innovations is an agricultural technology startup. When preparing its financial statements, the directors are debating the application of the IASB Conceptual Framework's qualitative characteristics.

Which TWO of the following are classified as ENHANCING qualitative characteristics of useful financial information?

Section A

AstroData Co provides space exploration data analytics. On 1 October 20X5, AstroData entered into a contract to provide a client with a specialized data dashboard and 12 months of continuous satellite data updates for a total fixed fee of $150,000. The dashboard and the updates are distinct performance obligations. The standalone selling price of the dashboard is $60,000 and the updates are $120,000. The dashboard was delivered on 1 October 20X5.

What amount of revenue should AstroData Co recognize for the year ended 31 December 20X5? (Calculate to the nearest whole dollar)

Section A

Abyss Mining Co operates deep-sea mining equipment. On 1 January 20X3, Abyss acquired a specialized submersible for $2,000,000 with a useful life of 10 years and nil residual value. Abyss uses the revaluation model. On 31 December 20X4, the submersible was revalued to $1,920,000. On 31 December 20X5, due to technological advancements, the fair value fell to $1,300,000.

What amount should be charged to the statement of profit or loss for the year ended 31 December 20X5 regarding the revaluation decrease?

Section A

SkyNet Logistics operates a fleet of commercial delivery drones. Due to new aviation regulations, the drones' flight paths are restricted, indicating potential impairment. The fleet has a carrying amount of $4,500,000. The fair value less costs of disposal of the fleet is $3,800,000. The value in use is calculated by discounting expected future cash flows of $900,000 per year for the next 5 years at a discount rate of 8%. (The 5-year annuity factor at 8% is 3.993).

What is the impairment loss to be recognized in the statement of profit or loss?

Section A

Nomad Retail operates pop-up retail pods. On 1 January 20X6, Nomad entered into a 4-year lease for a prime location pod. Lease payments are $25,000 per year, payable in advance on 1 January each year. Nomad incurred initial direct costs of $1,500. The interest rate implicit in the lease is 5%. (The present value of an ordinary annuity of $1 for 3 years at 5% is 2.723).

What is the initial measurement of the right-of-use (ROU) asset on 1 January 20X6?