Reference no: EM133942326

Financial Reporting

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Q1. Refer to the case that you discussed in the class. Depending upon your group number make the following assumptions.

Based on the assumptions for your group, answer the questions Q1a to Q1d. Assume that lease will be effective from 1st January 2026.
Q1Prepare 2amortisation tablesfor all the years assuming
a. the first lease installment begins when the lease starts. i.e. 1 January 2026.

b. The first lease installment begins when the lease starts after one year i.e. 31st December 2026.

Q2a. Which Type of lease is this? Why? Q2b. Given a choice which option would you select? Why? What could be the disadvantages of the option that you selected?

Q3a. Passing the journal entries in the books of lessee and Lessor - pass the journal entries for two full years - Recording the lease, payment of lease instalment, depreciation, accrual of lease etc. as applicable to your case. Get world-class assignment help from subject experts.

Q3b. Based on the amortisation table answer the following questions
a. Would the lease value change if the first lease installment starts with the lease period?Why?

b. What happens to lease value and lease rent, if the rate of interest increases/decreases? Why?
c. Does the amount of interest remain same, every year?Why?

Q4a For each of the following item, write how in whose books the item will appear, in which statement will it appear and at what value will it appear, as on 31.12.2027
Q4b. Disclosure of Lease in the annual reports: From the selected annual report find out the lease disclosure. Find out how much is the current portion of the lease liability and non current portion of the lease liability, as disclosed in the balance sheet of the company.

Q5. Explain with two examples, how due to the "temporary differences", the book income of a company and taxable income of a company differs.

Q6. Explain the terms Deferred tax assets and Deferred tax liabilities. In each of the following cases, analyse whether it would be deferred tax asset or deferred tax liability for the year 2024. Justify your answer with a rationale.

Q7. Compare and evaluate the defined contribution plan and defined benefit plan of pension. According to you which plan is more risky from the employers point of view? Why? Justify your answer. ( The answer can be written by referring to PPTs, Videos and E Books available for the course )

Q8. Refer to the notes to the accounts from the annual report of the company which you have selected from above links, providing more information about the retirement benefits to employees / end of service benefits to employees.
a. Copy the notes and reproduce it below. Read them carefully. ( provide the ref. number of note and the pages)
(b) Pension and social security policy within the U.A.E

1 How will the decision of number of machines to be leased impact the UCO, financially?
2 What would be the difference if company chooses to take the machines from Xerox instead of Canon?
3 Why is the interest not charged when the first lease payment starts with starting of lease?
4 Is the Lease value is same as Lease payments made by lessee to lessor?
4 Does UCO pay the same amount to the supplier under lease, that it would have paid under purchasing option?
5 If not, what are the advantages of going for lease option?
6 Why Reducing balance method is preferred to straight line method by income tax act?
7 What difference does it make if reducing balance method is chosen instead of SLM
8 What amount of lease laibility would be shown as current liability and what would be shown as non
current liability in the balance sheet as on 31.12.2024?
9 in the year 2023, how much would be the amount that would be reflected in income statement and
what would be the amount reflected in balance sheet
10 Is cost of capital same as bank rate?
11 Is the lease value same as fair marekt value of the asset or is it same as purchase price?
12 What is the effect of changing the number of years of lease term?
13 How would it make a difference if company chooses ADCB instead of Mashreq bank?