Q9. Sincere Request not to copy from other answers. This is a different question. If seen copying, will report your account and downvote the answer.

Q10.

Delta prepares financial statements to 31 March each year. Delta applies IAS 12 Income Taxes and IAS 41 Agriculture in the preparation of its financial statements. IAS 12 requires that entities recognise deferred tax liabilities on taxable temporary differences and, in certain circumstances, deferred tax assets on deductible temporary differences. Temporary differences are determined by comparing the carrying amount of an asset or liability with its tax base. IAS 41 sets out the principles of recognition and measurement for biological assets and harvested produce. Note 1 - Temporary differences On 1 October 20X4, Delta purchased an item of plant for $4 million. The estimated useful life of the plant was five years, with no residual value. Under tax legislation in the country in which Delta is located, purchases of plant attract a tax deduction of 50% of the cost in the accounting period in which the plant is purchased and 25% of the cost in each of the following two accounting periods. On 1 July 20X4, Delta borrowed $20 million from a bank. The loan attracts interest at a rate of 8% per annum on the $20 million borrowed. The interest is payable annually in arrears. The loan is repayable on 30 June 20X9. Under tax legislation in the country in which Delta is located, a tax deduction for the interest on loans is available in the accounting periods in which the interest is actually paid. On 1 April 20X4, Delta purchased some land for $15 million. Delta uses the revaluation model to measure land in its financial statements. On 31 March 20X5, Delta estimated that the value of the land was $18 million and this amount was recognised in Delta's financial statements. Under tax legislation in the country in which Delta is located, gains on the value of land are not taxable unless or until the land is sold. Delta has no intention of disposing of this land in the foreseeable future. The rate of corporate income tax in the country in which Delta is located is 20% per annum. The directors of Delta anticipate that Delta will make taxable profits for the foreseeable future. Delta had no temporary differences at 31 March 20X4. (12 marks) Note 2 - Agricultural activity Delta is a farming entity specialising in milk production. Cows are milked on a daily basis. Milk is kept in cold storage immediately after milking and sold to retail distributors on a weekly basis. On 1 April 20X4, Delta had a herd of 500 cows which were all three years old. During the year, some of the cows became sick and on 30 Sentember 2014 20 which the interest is actually paid. On 1 April 20X4, Delta purchased some land for $15 million. Delta uses the revaluation model to measure land in its financial statements. On 31 March 20X5, Delta estimated that the value of the land was $18 million and this amount was recognised in Delta's financial statements. Under tax legislation in the country in which Delta is located, gains on the value of land are not taxable unless or until the land is sold. Delta has no intention of disposing of this land in the foreseeable future. The rate of corporate income tax in the country in which Delta is located is 20% per annum. The directors of Delta anticipate that Delta will make taxable profits for the foreseeable future. Delta had no temporary differences at 31 March 20X4. (12 marks) Note 2 - Agricultural activity Delta is a farming entity specialising in milk production. Cows are milked on a daily basis. Milk is kept in cold storage immediately after milking and sold to retail distributors on a weekly basis. On 1 April 20X4, Delta had a herd of 500 cows which were all three years old. During the year, some of the cows became sick and on 30 September 20X4 20 cows died. On 1 October 20X4, Delta purchased 20 replacement cows at the market for $210 each. These 20 cows were all one year old when they were purchased. On 31 March 20X5, Delta had 1,000 litres of milk in cold storage which had not been sold to retail distributors. The market price of milk at 31 March 20X5 was $2 per litre. When selling the milk to distributors, Delta incurs selling costs of 10 cents per litre. These amounts did not change during March 20X5 and are not expected to change during April 20X5. Information relating to fair value and costs to sell is given below: Date Fair value of a dairy cow which is: Costs to sell a cow at market 1 year old 172 years old 3 years old 4 years old $ $ $ $ $ 1 April 20X4 200 220 270 250 10 1 October 20X4 210 230 280 260 10 31 March 20x5 215 235 290 265 11 (13 marks) 7 (P.T.O. Required: Using the information in notes 1 and 2, explain, with appropriate computations, how Delta should report these transactions in the financial statements for the year ended 31 March 20X5. purchase outright and has a useful life of around 25 years. How can it be presented as Omega's asset in these circumstances? - Where does the figure of $1.8 million come from? - Apart from the right-of-use asset, how else will this transaction affect our financial statements? | don't need detailed workings here, just explanations. (11 marks) Question 2 - Segment reporting I know that, because we're a listed entity, we are required to disclose details of the financial performance and financial position of different business segments in the notes to our financial statements. I thought it would be interesting to compare the segment report in our financial statements with that of a key competitor. When I did this, I found myself very confused. Our segment report was based on the performance and position by geographical area whereas our competitor's report was based on the performance and position by product type. How can this be correct when both of us are preparing our financial statements in accordance with International Financial Reporting Standards (IFRS Standards) is there not a definition of a 'segment that would be applied to all businesses? (8 marks) Question 3 - Immaterial transactions You may know that the contract for cleaning our Head Office has been given to a firm which is controlled by my brother. This contract was approved in the normal way and I was not involved in the approval process to avoid any perception of a conflict of interest as my brother and I are known to holiday and socialise together. The contract has normal commercial terms and is very insignificant in the context of Omega as an entity. I'm very surprised, therefore, to see details of this contract disclosed in our financial statements when many other much more financially significant contracts are not disclosed in the same detail. Surely this disclosure is unnecessary when the monetary amounts are so small and there is nothing out of the ordinary' about the contract? (6 marks) Required: Provide answers to the questions raised by one of Omega's directors relating to the financial statements for the year ended 31 March 20X5