IOP-4 Please do not copy other answers. This is a different question. If copied from other answers I will downvote and report your account .

Q1.

Q2.

You are the financial controller of Epsilon, a listed entity with a number of subsidiaries. The consolida Epsilon for the year ended 31 March 20X5 are currently being prepared. One of the directors of Epsi which have arisen as a result of her review of the draft consolidated financial statements. The following exhibits, available on the left-hand side of the screen, provide information relevant to t 1. New subsidiary the financial statements of Newby. 2. Investment - details of an equity investment. 3. Measurement change - details of a change in measurement method of inventory. This information should be used to answer the question requirements within the response option I know during the year ended 31 March 20X5 we acquired Newby. Newby is a small company which operates in the construction industry. I also know that the shares in Newby were previously owned equally by three family members, and that Newby's borrowing was a bank loan. I had a look at Newby's audited individual financial statements for the current year. The audit report identified no issues with how the financial statements had been prepared but I don't understand how this can be correct. Newby is located in the same country as we are and is subject to the same regulatory regime. The financial statements of Newby do not appear to be wholly compliant with full International Financial Reporting Standards (IFRS standards). For example, the notes to Newby's financial statements state that all borrowing costs are expensed as they are incurred despite some of these borrowings relating to the construction of a new factory. Furthermore, the notes to Newby's financial statements don't appear to contain all the disclosures required by full IFRS standards. Please can you answer the following questions (I don't need to know the mechanics of the consolidation process - I know that already): 1. Please explain why Newby has been allowed to prepare individual financial statements which don't appear to wholly comply with full IFRS standards. 2. Please explain if Newby will need to use full IFRS standards in its own financial statements now that it's part of our group. You will know that during the year we made a strategic long-term Investment in Sandy, an entity which is a vital part of our supply chain. I believe we purchased 40% of the shares, which carry one vote cach, and that this gave us the right to appoint four of the ten directors. The other six directors are independent of each other, they don't always agree when voting. I was expecting to see Sandy Included as a subsidiary in our consolidated financial statements but instead the Investment has been shown as a single figure in our consolidated statement of financial position. The carrying amount of the investment is presented as $40 millon but, given the share price, I have calculated the fair value as $42 million. I thought that equity Investments that weren't consolidated needed to be measured at fair value. Please explain: 1. Why we aren't including Sandy as a subsidiary in our consolidated financial statements. 2. What method will have been used to arrive at the carrying amount of $40 milion rather than measuring the investment at talr value. nancial statements indicate that in the current period we began measuring our inventory erials using the weighted average cost formula. In previous periods we measured all ories using the first in first out formula. I have a number of questions here: ve allowed to change the measurement method in this way? do change the measurement method for our inventory of raw materials shouldn't we ge it for all of our inventories? do we ensure that the financial statements for this year are comparable with those st year given that a different measurement method has been used for raw materials tory? Provide answers to the queries raised by one of Epsilon's directors relating to the consolidated financial statements for the year ended 31 March 20X5. The queries you need to address appear in exhibits 1 - 3. Omega has a herd of 300 cattle which are all six months old on 31 March 20x5 and a herd of 200 sheep which are all one year old at 31 March 20X5. The herd of cattle will be sold when the cattle are two years old. The herd of sheep is expected to be sold within the next 12 months. There are two markets available to Omega in which they could sell the cattle and the sheep, Market 1 and Market 2. Market 1 is the principal market in which cattle could be sold but Omega sells its sheep in both Market 1 and Market 2 in roughly equal proportions. Therefore, neither Market 1 nor Market 2 can be identified as the principal market in which Omega could sell sheep. Relevant market prices and relevant costs of sale at 31 March 20x5 are as follows: Market 1 Market 2 Cattle Sheep Cattle Sheep $ $ $ $ Gross selling price per animal 80 61 85 63 Transport costs per animal 4 3 5 4 Selling costs per animal 2 2 3 4