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FAC2601: Financial Accounting for Companies
Comprehensive Exam Revision Guide
May/June 2025 & May/June 2024
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
Financial Accounting – IFRS Standards
Exam Revision Guide
FAC2601
Module Code:
Financial Accounting for Companies
Module Name:
May/June 2025 & May/June 2024
Papers:
100 marks each paper
Total Marks:
3 hours
Duration:
IFRS (IAS 2, 7, 8, 12, 16, 20, 36, 37, 38, 40; IFRS 15, 16)
Standards:
Use this guide to revise thoroughly. Focus on understanding, not memorisation. All
calculations must be shown in the actual exam.
Exam Revision Notes | FAC2601 | 2024 & 2025
,FAC2601 | Exam Revision Financial Accounting for Companies
PAPER 1: MAY/JUNE 2025
FAC2601 – Financial Accounting for Companies
Duration: 3 Hours Total Marks: 100
Key Concept
General Instructions (2025 Paper):
• Answer ALL questions. Show ALL calculations – no marks for unsupported
amounts.
• Answers must comply with IFRS. Accounting policy notes are NOT required.
• Comparative figures are NOT required unless specifically asked.
• Round all amounts to the nearest Rand (R).
• Non-programmable calculator permitted.
Page 2 of 39
,FAC2601 | Exam Revision Financial Accounting for Companies
Question 1 (2025) 30 marks
(a) 12 marks
Question: Grainfield Ltd is a listed manufacturing company with a financial year-end of
30 June 2025. The following information relates to its property, plant and equipment:
Milling Machine (IAS 16):
• Purchased 1 July 2022 for R1 800 000. Installation costs of R120 000 were incurred.
• Estimated useful life: 10 years. Residual value: R60 000.
• Depreciation method: straight-line.
• A major overhaul component was separately identified at initial recognition at
R300 000. This component is overhauled every 3 years. The first overhaul was com-
pleted on 30 June 2025 at a cost of R360 000.
• Grainfield Ltd uses the cost model.
Required (a): Prepare the Property, Plant and Equipment note (machinery section
only) in the financial records of Grainfield Ltd for the year ended 30 June 2025. A total
column is not required.
Answer:
Key Concept
IAS 16 Key Rules: Cost = purchase price + directly attributable costs. Com-
ponents with different useful lives are depreciated separately (component account-
ing). On replacement, derecognise the old component’s carrying amount and
capitalise the new cost.
Step 1 – Identify Components at 1 July 2022:
• Main machine: R1 800 000 + R120 000 – R300 000 = R1 620 000
• Overhaul component: R300 000 (separate component, useful life 3 years, residual
R0)
Step 2 – Annual depreciation:
R1 620 000 − R60 000
Main machine (p.a.) = = R156 000
10
R300 000 − R0
Overhaul component (p.a.) = = R100 000
3
Page 3 of 39
, FAC2601 | Exam Revision Financial Accounting for Companies
Step 3 – Carrying amount of overhaul component at 30 June 2025 (before
replacement):
R300 000 − (3 × R100 000) = R0 (fully depreciated after 3 years)
Step 4 – Treatment of new overhaul (R360 000) on 30 June 2025:
• Derecognise old component at carrying amount of R0 (no loss on derecognition).
• Capitalise new overhaul at R360 000 (new 3-year component).
• New overhaul depreciation from 1 July 2025 (next year): R360 = R120 000
p.a.
Property, Plant and Equipment Note – Year ended 30 June 2025:
Main Machine (R) Overhaul Component (R)
Carrying amount: 1 July 2024
Cost 1 620 000 300 000
Accum. depreciation (2 yrs) (312 000) (200 000)
Opening carrying amount 1 308 000 100 000
Additions – 360 000
Derecognition (old component) – (100 000)
Depreciation for year (156 000) (100 000)
Closing carrying amount: 30 June 2025 1 152 000 160 000
Cost (closing) 1 620 000 360 000
Accum. depreciation (closing) (468 000) (200 000)
Exam Tip
Closing accumulated depreciation – Main Machine: 3 years × R156 000 =
R468 000.
Closing accumulated depreciation – New Overhaul: Only the current-
year depreciation of R100 000 on the old component applies; new component
(R360 000) was added on 30 June 2025 and has R200 000 accum. dep. after re-
placement calculation. Show cost of new component = R360 000; accumulated
depreciation = R200 000 (derecognised old + current year dep on old = R200 000).
Closing CV = R160 000.
Page 4 of 39
]]
FAC2601: Financial Accounting for Companies
Comprehensive Exam Revision Guide
May/June 2025 & May/June 2024
⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆ ⋄ ⋆
Financial Accounting – IFRS Standards
Exam Revision Guide
FAC2601
Module Code:
Financial Accounting for Companies
Module Name:
May/June 2025 & May/June 2024
Papers:
100 marks each paper
Total Marks:
3 hours
Duration:
IFRS (IAS 2, 7, 8, 12, 16, 20, 36, 37, 38, 40; IFRS 15, 16)
Standards:
Use this guide to revise thoroughly. Focus on understanding, not memorisation. All
calculations must be shown in the actual exam.
Exam Revision Notes | FAC2601 | 2024 & 2025
,FAC2601 | Exam Revision Financial Accounting for Companies
PAPER 1: MAY/JUNE 2025
FAC2601 – Financial Accounting for Companies
Duration: 3 Hours Total Marks: 100
Key Concept
General Instructions (2025 Paper):
• Answer ALL questions. Show ALL calculations – no marks for unsupported
amounts.
• Answers must comply with IFRS. Accounting policy notes are NOT required.
• Comparative figures are NOT required unless specifically asked.
• Round all amounts to the nearest Rand (R).
• Non-programmable calculator permitted.
Page 2 of 39
,FAC2601 | Exam Revision Financial Accounting for Companies
Question 1 (2025) 30 marks
(a) 12 marks
Question: Grainfield Ltd is a listed manufacturing company with a financial year-end of
30 June 2025. The following information relates to its property, plant and equipment:
Milling Machine (IAS 16):
• Purchased 1 July 2022 for R1 800 000. Installation costs of R120 000 were incurred.
• Estimated useful life: 10 years. Residual value: R60 000.
• Depreciation method: straight-line.
• A major overhaul component was separately identified at initial recognition at
R300 000. This component is overhauled every 3 years. The first overhaul was com-
pleted on 30 June 2025 at a cost of R360 000.
• Grainfield Ltd uses the cost model.
Required (a): Prepare the Property, Plant and Equipment note (machinery section
only) in the financial records of Grainfield Ltd for the year ended 30 June 2025. A total
column is not required.
Answer:
Key Concept
IAS 16 Key Rules: Cost = purchase price + directly attributable costs. Com-
ponents with different useful lives are depreciated separately (component account-
ing). On replacement, derecognise the old component’s carrying amount and
capitalise the new cost.
Step 1 – Identify Components at 1 July 2022:
• Main machine: R1 800 000 + R120 000 – R300 000 = R1 620 000
• Overhaul component: R300 000 (separate component, useful life 3 years, residual
R0)
Step 2 – Annual depreciation:
R1 620 000 − R60 000
Main machine (p.a.) = = R156 000
10
R300 000 − R0
Overhaul component (p.a.) = = R100 000
3
Page 3 of 39
, FAC2601 | Exam Revision Financial Accounting for Companies
Step 3 – Carrying amount of overhaul component at 30 June 2025 (before
replacement):
R300 000 − (3 × R100 000) = R0 (fully depreciated after 3 years)
Step 4 – Treatment of new overhaul (R360 000) on 30 June 2025:
• Derecognise old component at carrying amount of R0 (no loss on derecognition).
• Capitalise new overhaul at R360 000 (new 3-year component).
• New overhaul depreciation from 1 July 2025 (next year): R360 = R120 000
p.a.
Property, Plant and Equipment Note – Year ended 30 June 2025:
Main Machine (R) Overhaul Component (R)
Carrying amount: 1 July 2024
Cost 1 620 000 300 000
Accum. depreciation (2 yrs) (312 000) (200 000)
Opening carrying amount 1 308 000 100 000
Additions – 360 000
Derecognition (old component) – (100 000)
Depreciation for year (156 000) (100 000)
Closing carrying amount: 30 June 2025 1 152 000 160 000
Cost (closing) 1 620 000 360 000
Accum. depreciation (closing) (468 000) (200 000)
Exam Tip
Closing accumulated depreciation – Main Machine: 3 years × R156 000 =
R468 000.
Closing accumulated depreciation – New Overhaul: Only the current-
year depreciation of R100 000 on the old component applies; new component
(R360 000) was added on 30 June 2025 and has R200 000 accum. dep. after re-
placement calculation. Show cost of new component = R360 000; accumulated
depreciation = R200 000 (derecognised old + current year dep on old = R200 000).
Closing CV = R160 000.
Page 4 of 39
