Page 14 - CIMA OCS Workbook February 2019 - Day 1 Tasks

CIMA FEBRUARY 2019 – OPERATIONAL CASE STUDY

Group accounting

The board are considering buying Safari Toys. Be prepared to explain the accounting treatment of
such a move, linking this to the percentage of shares acquired.
Non-current assets
The financial reporting (F1) aspects of NCAs are a common exam theme, so make sure you revise
the different angles a question could take. It is clear that the company is planning to invest in new
products. Given this, there may be a need for additional investment in NCAS with associated
implications for the financial statements, which costs can be capitalised, establishing a
depreciation policy, the impact of grants and so on.

Alternatively, you could be asked to discuss aspects of accounting for intangible assets, such as
goodwill on acquisition of Safari Toys or whether or not it could capitalise research and
development into new products..

10 KAPLAN PUBLISHING