Question

Pls do not handwritten for easy reading

=== this is what given to me ==

Question:-
Noel Gifts International Ltd("Noel') Annual Report for the year ending 30 June 2018 available from S&P Capital IQ platform. You should have already created an account an account on the S&P Capital IQ platform from your earlier courses. Also, note that the questions make reference to Singapore Financial Reporting Standards(FRS).
a)Discuss what constitutes the cost of Noel's inventories and their measurement policies. State the page sources of your information from the Annual Report when presenting your answer

b) Compute the amount of allowance for inventories as a percentage of the gross inventory balance as at 30 June 2018, rounding to the nearest 2 decimal places. Discuss whether Noel's estimate is prudent and sufficient

c) Discuss under what circumstance can Noel reverse the write down of inventories?

d) Discuss any concerns you may have on Noel's inventory situation based on what you know about Noel's business or industry.

Answer 1

a) After January 1st 2018 FRS 115 establishes principles on the nature,amount,timing,uncertainty of revenue and cash flows arising from an entity's contracts with the customers.

Under FRS 115 An entity recognises revenue in accordance with that core principle by applying the 5 step revenue recognition model

• Step-1: Identify the contract(s) with the customers.
• Step 2: Identify the seperate performance obligations in the contract.
• Step3: Determine the transaction price.
• Step4: Allocate the transaction price to the separate performance obligations.
• Step5: Recognise Revenue when the entity satisfies a performance Obligation

c) Identify the performance obligations in the contract: includes promises for transfer goods or services to a customer in exchange for consideration stated in the contract.If the goods are distinct in nature ,the performance obligations will be accounted separately.a good or service is considered distinct  if the customer can benefit from the good or service individually or in tandem with other resources that are readily available to the customer.The transaction price is the contractual consideration that an entity expects to receive in exchange for the trasference of the promised goods or services to the customers.If there is a variable consideration ,the entity makes an estimate on the entitled amount of consideration for the goods promised or services delivered.

b) Some information is missing in point b.Financial report is not produced in the question.so it can't be answered.