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LOP-6 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.

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You are the financial controller of Omega, a listed entity involved in the exploration for and evaluation Omega's directors has raised some queries following his review of the consolidated financial stateme September 20X5. The following exhibits, available on the left-hand side of the screen, provide information relevant to t 1. 2. 3. Exploration and evaluation assets. Events after 30 September 20X5. Use of IFRS Standards. This information should be used to answer the question requirement within the response option pro When I looked at our financial statements, I saw a note which gave a breakdown of our exploration and evaluation assets. I compared it with that of a competitor and I have the following three questions. First, both notes showed the breakdown of the exploration and evaluation assets figure into various categories but they are not presenting the same categories despite both companies operating in similar ways. How can this be right when both companies use IFRS Standards to prepare their financial statements? Second, why does neither company include the costs of developing mineral resources as part of the exploration and evaluation assets figure? As a key part of both of our businesses, should these costs not be recognised as part of this figure? Finally, the financial statements state that we measure our exploration and evaluation assets using the cost model while the competitor's state they use the revaluation model. Is this an acceptable inconsistency when both companies are preparing financial statements in accordance with IFRS Standards? When I read two notes to our financial statements, they seemed to contradict each other. One of the notes referred to a legal case from December 20X4 in which we were being sued for damages by a customer. We originally thought Omega would have to pay damages of $5 million but the case was finally settled for $5-5 million on 20 October 20X5. The financial statements at 30 September 20x5 presented a liability for $5-5 million, despite this only being confirmed after the year end. A second note referred to the major fire in one of our factories on 15 October 20X5. The damage caused to the factory is estimated at $5-75 million. However, the note says that no adjustments have been made to the amounts recognised in the financial statements for the year ended 30 September 20X5 in respect of the damage caused by the fire. This will have a significant, but temporary impact on the cash flow of the business, however, it will not cause our own going concern status to be in doubt. The two events are not being treated consistently despite the financial amounts being similar Please can you explain these apparent inconsistencies? I am aware that a major customer, owing us a significant amount, became insolvent on 20 November 20X5. We are unlikely to recover much, if any, of this debt. Why don't the financial statements contain at least a note explaining to our shareholders what has happened? I am aware that the financial statements were authorised for issue on 15 November 2005. You will know that we acquired a new subsidiary, Epsilon, on 1 October 20X4. Epsilon has a year end of 30 September and has prepared financial statements using national accounting standards, not IFRS Standards. Now that they have become part of the Omega group, we will of course require them to use IFRS Standards. We have incorporated their results into our consolidated financial statements using IFRS Standards but Epsilon needs to know what to do in its own financial statements. They have the IFRS Standard compliant financial statements for the year ended 30 September 20X5 but what about the comparative figures? Can they use the financial statements for their year ended 30 September 20X4, prepared under the national accounting standards, as comparative figures for their 20x5 financial statements? Please let me know how to advise the financial controller of Epsilon. Provide answers to the queries raised in Exhibits 1 - 3 relating to the consolidated financial statements for the year ended 30 September 20X5. These financial statements were authorised for issue on 15 November 20X5. Q2. Alpha currently has investments in two other entities, Beta (Note 1) and Gamma (Note 2). The draft statements of financial position of Alpha and Beta at 30 September 2018 were as follows: Alpha Beta $'000 $'000 Assets Non-current assets: Property, plant and equipment (Notes 1 and 5) 775,000 380,000 Investments (Notes 1-3) 410,000 Nil 1,185,000 380,000 Current assets: Inventories (Note 4) 150,000 95,000 Trade receivables (Note 4) 100,000 80,000 Cash and cash equivalents 18,000 15,000 - 268,000 190,000 - Total assets 1,453,000 570,000 Equity and liabilities Equity Share capital ($1 shares) 520,000 160,000 Retained earnings 693,000 200,000 Total equity 1,213,000 360,000 -- Non-current liabilities: Long-term borrowings 100,000 80,000 Deferred tax 60,000 45,000 -- Total non-current liabilities 160,000 125,000 Current liabilities: Trade and other payables 60,000 55,000 Short-term borrowings 20,000 30,000 Total current liabilities 80,000 85,000 -- Total liabilities 240,000 210,000 Total equity and liabilities 1,453,000 570,000 Note 1 - Alpha's investment in Beta On 1 October 2011, Alpha acquired 120 million shares in Beta and gained control of Beta on that date. The acquisition was financed by a cash payment by Alpha of $144 yuuuvili UIT uuqur LIVIT UI venu ruu Naan necessary between 1 October 2012 and 30 June 2018. Note 4 - Intra-group trading Alpha supplies a component to Beta at a mark-up of 25% on its production cost. The trade receivables of Alpha at 30 September 2018 include $10 million receivable from Beta in respect of sales of the component. Beta paid Alpha $10 million to clear the outstanding balance on 29 September 2018. Alpha received and recorded this amount on 3 October 2018. On 30 September 2018, the inventories of Beta included $15 million in respect of components purchased from Alpha. All such inventory is measured at original cost to Beta. Note 5 - Property lease On 1 October 2017, Alpha began to lease a property under a 10-year lease. The annual rate of interest implicit in the lease was 5%. The lease rentals payable by Alpha were $10 million, payable annually in arrears. The lease does not transfer ownership of the property to Alpha at the end of the lease term. The lease contains no option for Alpha to purchase the property at the end of the lease term. On 1 October 2017, Alpha incurred direct costs of $4 million in arranging this lease. The only accounting entries made by Alpha in respect of this lease were to charge $14 million to the statement of profit or loss. Using a discount rate of 5%, the cumulative present value of $1 payable annually in arrears for ten years is $7.72. 5 (P.T.O. Required: (a) Compute the profit or loss on disposal of the investment in Delta which would be shown in the consolidated statement of profit or loss of Alpha for the year ended 30 September 2018 (b) Prepare the consolidated statement of financial position of Alpha at 30 September 2018. You need only consider the deferred tax implications of any adjustments you make where the question specifically refers to deferred tax. Note: You should show all workings to the nearest $'000