INSTRUCTIONS

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INSTRUCTIONS

Each group is assigned a worksheet where they shall receive questions from other groups. The rece
Questions raised by one group cannot be repeated by another group.

Asking the receiving group to solve a particular problem is NOT considered a question for purposes
(a) problems which were part of the reporting group's presentation or
(b) problems solved in class.
Due date for raising questions (post in FB groups): Monday, March 11.
Due date for answering questions (post in FB groups): Friday, March 15.

*Maximum points per group (based on quality of questions raised and questions answered) = +0.3

GROUP 1
TOPIC: Prerequisites of SME Accounting, Financial Statements Presentation
SEC Notice of Adoption-IFRS for SMEs, Sections 1-8 and 10

QUERY FROM GROUP #:

It was mentioned in the SEC guidance that if an SME that uses the IFRS for
SMEs in a current year breaches the floor and ceiling size criteria at the end of
the current year, and the event causing the change is "significant and
continuing", the entity should transition to the applicable financial reporting
framework. Given this, how should the entity present its comparative
information? Should it restate its comparative information in accordance with
the full IFRS or should it be presented as is (in accordance with the IFRS for
SMEs)?

GROUP 1'S ANSWER:

GROUP 2
TOPIC: Financial Instruments and Inventories
Sections 11-12.14 and 13

QUERY FROM GROUP #:

It is mentioned in IFRS for SMEs that Sec. 13 (Inventories) does not apply to
agricultural produce at the point of harvest (Sec. 13.2) and it does not apply to
the measurement of inventories held by agricultural produce after harvest
(Sec. 13.3). This is similar to what we have studied in Full IFRS. However, in
Section 13.34, it is stated that agricultural produce at the point of harvest
becomes the cost of the inventories and you specify that this is the same with
Full IFRS which confused us.
So in applying IFRS for SMEs (Section 13), which will form part of the cost of
inventoriesthe agricultural produce at the point of harvest or the agricultural
produce after harvest?

GROUP 2'S ANSWER:

GROUP 3
TOPIC: Long-Term Assets
Sections 16-18 and 27

QUERY FROM GROUP #:

1. One stark difference in the initial recognition of intangible assets in Full IFRS
vs. SMEs is that in SMEs development cost that meet certain criteria is
capitalized. In SMEs however, Sec.18.14, which discusses the initial
recognition of internally generated intangible assets, mentions that all
research
are expensed
except when
"it forms
part of
the
2. Underand
IFRSdevelopment
for SMEs, recognition
of investment
property
requires
that
the
cost
of
another
asset
that
meets
the
recognition
criteria
in
IFRS."
To
help
fair value of the property can be measured reliably without undue cost orus
understand,
can
site oneone
scenario
an R&D
not expensedcompany
because
effort. What if,
foryou
example,
of the i.e.
factories
of cost
a manufacturing
it
forms
part
of
the
cost
of
another.
With
this
provision,
does
this
mean
stopped operating temporarily, and the same was rented out to anotherthat
theoretically,
internally
intangible
asset
does not
anymore?
company. Thean
PPE
(i.e. the generated
factory) then
meets the
definition
of exist
investment

property. However, for some reason its fair value cannot be ascertained
without incurring much cost and effort. Should the company report the factory
still as PPE even if it stopped using the property and the same is used for
rental purposes?

GROUP 3'S ANSWER:

GROUP 4
TOPIC: Liabilities and Equity
Sections 20-22 and 26

QUERY FROM GROUP #:

What is the alternative approach (please show Journal Entries) of recognizing

and measuring relevant accounts in the finance lease? i.e. if lease receivable
is measured at net investment rather than gross, how would the Journal
Entries amounts change (referring to your examples in the handouts)?

GROUP 4'S ANSWER:

GROUP 5
TOPIC: Topics in Revenue and Expense Recognition
Sections 23-25 and 28

QUERY FROM GROUP #:

GROUP 5'S ANSWER:

GROUP 6
TOPIC: Income Tax and Topics in Disclosure
SEC Implementing Guidelines-Adoption of IFRS for SMEs, Sections 29, 32-34.11 and 35

QUERY FROM GROUP #:

In IFRS for SMEs, Sec. 29.21 states that an entity shall recognize a valuation
allowance against deferred tax assets so that the net carrying amount equals
the highest amount that is more likely than not to be recovered based on
current or future taxable profit. What are the journal entries required for
recognizing the initial valuation allowance and for subsequent adjustments?
Should this account also be reported in the statement of financial position?
Also, in recognizing subsequent adjustments to the valuation allowance, what
will be the basis of comparison (i.e. to what amount will you compare the
current amount of the valuation allowance in order to identify adjustments)?

32-34.11 and 35

GROUP 6'S ANSWER: