Miranda Co Case
Information relevant to questions 116-120
Miranda Co prepares its financial statements to 30 September each year. Miranda Co’s draft financial statements were finalised on 20 October 20X3. They were authorised for issue on 15 December 20X3 and the AGM of shareholders took place on 23 December 20X3.
On 30 September 20X3, Miranda Co moved out of one of its properties and put it up for sale. The property met the criteria as held for sale on 30 September 20X3. On 1 October 20X2, the property had a carrying amount of $2.6m and a remaining life of 20 years. The property is held under the revaluation model. The property was expected to sell for a gross amount of $2.5m with selling costs estimated at $50,000.
Miranda Co decided to sell an item of plant during the year ended 30 September 20X3. On 1 October 20X2, the plant had a carrying amount of $490,000 and a remaining useful life of seven years. The plant met the held for sale criteria on 1 April 20X3. At 1 April 20X3, the plant had a fair value less costs to sell of $470,000, which had fallen to $465,000 at 30 September 20X3.
1. In accordance with IAS 10 Events after the Reporting Period, which of the following statements is/are CORRECT for Miranda Co?
1. All events which occur between 30 September 20X3 and 15 December 20X3 should be considered as events occurring after the reporting period
2. An event which occurs between 30 September 20X3 and 15 December 20X3 and which provides evidence of a condition which existed at 30 September 20X3 should be considered as an adjusting event
2. In accordance with IAS 10, which of the following events would be classed as a non‐ adjusting event in Miranda Co’s financial statements for the year ended 30 September 20X3?
3. What is the total amount charged to Miranda Co’s profit or loss in respect of the property for the year ended 30 September 20X3?
4. In accordance with IFRS 5 Non‐current Assets Held for Sale and Discontinued Operations, what is the carrying amount of the plant in Miranda Co’s statement of financial position as at 30 September 20X3?
5. Which of the following items should be classed as an asset held for sale under IFRS 5?