[Akiraryuu]

The official IAS format according to Edexcel can be found here: http://www.edexcel.com/migrationdocu...S_changes2.xls

I typed out a neater version of the new format if anyone wants em. The Edexcel one is just too messy! Hahaha

Anyone ready for this exam? I'm definitely not!

[ezioaudi77]

(Original post by Akiraryuu)
The official IAS format according to Edexcel can be found here: http://www.edexcel.com/migrationdocu...S_changes2.xls

I typed out a neater version of the new format if anyone wants em. The Edexcel one is just too messy! Hahaha

Anyone ready for this exam? I'm definitely not!

Could you send me your version? Thanks.

Also are these the only changes in the specification?

[Akiraryuu]

(Original post by ezioaudi77)
Could you send me your version? Thanks.

Also are these the only changes in the specification?

Here you go. As far as I know, the IAS changes only affects the Profit and Loss a/c (Income Statement), Balance Sheet (Statement of Financial Position) and Cash Flow Statement.

If you want to be sure, you can check out the new syllabus here.

Hope it helps

[ezioaudi77]

(Original post by Akiraryuu)
Here you go. As far as I know, the IAS changes only affects the Profit and Loss a/c (Income Statement), Balance Sheet (Statement of Financial Position) and Cash Flow Statement.

If you want to be sure, you can check out the new syllabus here.

Hope it helps

Thanks, your version is much better than the format edexcel has in its site But do you think the statement of financial position only has 2 columns and not 3? Or does it not matter?

Then what about the purchase of a company by another? You may have to draw up a balance sheet right? Also some evaluation questions change, like in Jan 2012, they asked "Evaluate whether you think it is beneficial to show Net Current Assets (Liabilities) on
the Statement of Financial Position (Balance Sheet) for a company."

[Akiraryuu]

(Original post by ezioaudi77)
Thanks, your version is much better than the format edexcel has in its site But do you think the statement of financial position only has 2 columns and not 3? Or does it not matter?

Then what about the purchase of a company by another? You may have to draw up a balance sheet right? Also some evaluation questions change, like in Jan 2012, they asked "Evaluate whether you think it is beneficial to show Net Current Assets (Liabilities) on
the Statement of Financial Position (Balance Sheet) for a company."

Hahaha, I'm a bit of a neat freak when it comes to these things and I absolutely cannot stand the Edexcel ver. It's fine whether the statement of financial position has two or three columns. You can draw a third column if it makes your presentation neater.

Everything must be in IAS terminology starting this June. That includes whatever terms, P&L a/cs and balance sheets. So if a merger question comes out and they ask for a balance sheet, you'll need to present it in the IAS format.


This was posted from The Student Room's iPhone/iPad App

[ezioaudi77]

(Original post by Akiraryuu)
Hahaha, I'm a bit of a neat freak when it comes to these things and I absolutely cannot stand the Edexcel ver. It's fine whether the statement of financial position has two or three columns. You can draw a third column if it makes your presentation neater.

Everything must be in IAS terminology starting this June. That includes whatever terms, P&L a/cs and balance sheets. So if a merger question comes out and they ask for a balance sheet, you'll need to present it in the IAS format.


This was posted from The Student Room's iPhone/iPad App

lol, me too... I didn't want to put that out right away
Anyway, thanks for clarifying my doubts.

So you do Accounting, Maths and Econ too huh? Is that all your A Levels? I do Business studies in addition to those but I'm doing that in January

[Akiraryuu]

(Original post by ezioaudi77)
lol, me too... I didn't want to put that out right away
Anyway, thanks for clarifying my doubts.

So you do Accounting, Maths and Econ too huh? Is that all your A Levels? I do Business studies in addition to those but I'm doing that in January

No problem And lol yes I do Acc, Maths, Econs and Chemistry AS. Quite an odd combination I know

[ezioaudi77]

(Original post by Akiraryuu)
No problem And lol yes I do Acc, Maths, Econs and Chemistry AS. Quite an odd combination I know

It's alright except for Chemistry which doesn't "fit" the others, but this is nothing compared to the weird combinations some of my friends have

[ezioaudi77]

Does anyone know the order of capitalising reserves for the issue of bonus shares? And what do they mean when they say "capitalise reserves in the most flexible form"?

[Warfare]

Does anyone have the mark scheme for accounting unit 2 edexcel JAN 2005?

[ezioaudi77]

(Original post by Warfare)
Does anyone have the mark scheme for accounting unit 2 edexcel JAN 2005?

There was no unit 2 paper in january 2005 because it was the first time since the new syllabus. Only the unit 1 exam was done, and the first unit 2 paper was in May 2005.

[julsola]

hey guys.,.. i realllyy need to need to knw abt the new formats of accounting unit 2??
something called IAS1 .. do we need to learn that format? formats changed for 1) company final account and 2) Cash flow statement right??

[julsola]

(Original post by Akiraryuu)
The official IAS format according to Edexcel can be found here: http://www.edexcel.com/migrationdocu...S_changes2.xls

I typed out a neater version of the new format if anyone wants em. The Edexcel one is just too messy! Hahaha

Anyone ready for this exam? I'm definitely not!

hey,.. is there any format for Company final account??

[Akiraryuu]

(Original post by julsola)
hey,.. is there any format for Company final account??

You mean the Income Statement and Statement of Financial Position? Yeah, it's in sheet 2 and 3 in the document I posted in post #23

[ezioaudi77]

What is the order in capitalising reserves for the issue of bonus shares? Do you start with Profit and Loss, or Share Premium?

[Akiraryuu]

(Original post by ezioaudi77)
What is the order in capitalising reserves for the issue of bonus shares? Do you start with Profit and Loss, or Share Premium?

According to my textbook, you start with:

1. Retained profits
2. Any other revenue reserves
3. Any capital reserves, e.g. share premium

[ezioaudi77]

(Original post by Akiraryuu)
According to my textbook, you start with:

1. Retained profits
2. Any other revenue reserves
3. Any capital reserves, e.g. share premium

That's what I thought too, but in the January 2006 paper, question 1 asks to make journal entries for the issue of bonus shares retaining capital reserves in the most flexible form.

In the markscheme, the journal entries are like this:

~
Share Premium - Debit
Revaluation reserve - Debit

Bonus shares - Credit

~
Bonus shares - Debit

Ordinary Share Capital - Credit

Can you explain this to me?

[Akiraryuu]

(Original post by ezioaudi77)
That's what I thought too, but in the January 2006 paper, question 1 asks to make journal entries for the issue of bonus shares retaining capital reserves in the most flexible form.

In the markscheme, the journal entries are like this:

~
Share Premium - Debit
Revaluation reserve - Debit

Bonus shares - Credit

~
Bonus shares - Debit

Ordinary Share Capital - Credit

Can you explain this to me?

Oh god, shares are my weakest topic but I'll try to make sense.

When the question said "The directors wish to retain the company reserves in the most flexible form", it means that the directors want the reserves to be "flexible" i.e. at the end of the day, the remaining reserves can be used for various activities like issuing dividends and bonus shares, transfers to other reserves etc and not just for one activity.

Share premium is generally a very inflexible reserve as you can only use it for limited things like the issue of bonus shares while retained profits are more flexible as it can be used for various activities. So, in regards to "retaining the company reserves in the most flexible form" the most inflexible reserve (which is the share premium and revaluation reserve in this case) is used first so that at the end the more flexible reserves are left in the books.

This question is a special case as they specified which order to use the reserves in regards to the issue of bonus shares. Normally, a company would use up the remaining retained profits first before touching the other reserves.

I trust the mark scheme makes a little more sense now?

tl;dr The order which you need to use to tackle this question is basically the reverse of what you would've normally use first i.e. Share premium -> other reserves -> retained profits

[ezioaudi77]

(Original post by Akiraryuu)
Oh god, shares are my weakest topic but I'll try to make sense.

When the question said "The directors wish to retain the company reserves in the most flexible form", it means that the directors want the reserves to be "flexible" i.e. at the end of the day, the remaining reserves can be used for various activities like issuing dividends and bonus shares, transfers to other reserves etc and not just for one activity.

Share premium is generally a very inflexible reserve as you can only use it for limited things like the issue of bonus shares while retained profits are more flexible as it can be used for various activities. So, in regards to "retaining the company reserves in the most flexible form" the most inflexible reserve (which is the share premium and revaluation reserve in this case) is used first so that at the end the more flexible reserves are left in the books.

This question is a special case as they specified which order to use the reserves in regards to the issue of bonus shares. Normally, a company would use up the remaining retained profits first before touching the other reserves.

I trust the mark scheme makes a little more sense now?

tl;dr The order which you need to use to tackle this question is basically the reverse of what you would've normally use first i.e. Share premium -> other reserves -> retained profits

Excellent explanation, thank you loads!! The same order applies to transferring funds to the Capital Redemption Reserve for the redemption of shares (retained profits -> other reserves), right?

Btw, what were your UMS for unit 1?

[Akiraryuu]

(Original post by ezioaudi77)
Excellent explanation, thank you loads!! The same order applies to transferring funds to the Capital Redemption Reserve for the redemption of shares (retained profits -> other reserves), right?

Btw, what were your UMS for unit 1?

Aww you're welcome

Okay, first off, redemption of shares is a capital transaction. In this case, companies would normally use their capital reserves (share premium, asset revaluation reserves, etc) before touching their retained profits if no new issue of shares has been made.

If there are new issue of shares be it ordinary or preference, and the revenue gained from the new issue are enough to cover the redemption cost of shares, then there is no need to touch any of the reserves or retained profits. If the revenue from the new issue of shares are not enough to cover the redemption cost then companies normally would pay the excess cost with their most inflexible reserves first. They would only touch their retained profits if they have no choice.

Think about it this way, paying off the redemption of shares is a liability to the company so it doesn't make sense if they use their profits to do so as the profits can be used for other capital activities instead.

So, in this case, the order to pay off redemption of shares would be to transfer the share premium, then other reserves and then only retained profits into the capital redemption reserve.

Hence, I made the conclusion that the order for the issue of shares are: retained profits -> other reserves -> share premium (unless they want to maintain the reserves in the most flexible form)

and the order for the redemption of shares are: share premium -> other reserves -> retained profits.

Phew, that was hard. I got a 220 UMS for unit 1. I screwed that paper up as I took 11 papers last January (oh god the stress was horrendous!). I retook it this May and I bet I screwed that up as well so for an A I'll need 260 which is definitely an A* if you look at the grade boundaries.