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ACCA F7 lectures F7 notes
March 14, 2016 at 6:14 am
Regarding Example 11. Following along, in working 2 – Goodwill, I include the Fair value adjustments to get the proper goodwill figure. So far so good. In Working 3 – Consolidated Retained Earnings I directly add the fair value adjustments to retained earnings (less depreciation of DNCA, inventory as per question). Im with you so far.
My question is, how would working 3 change, and what else would I need to change to my workings so that I may put the fair value adjustments in revaluation reserve, and still calculate the correct retained earnings and other figures for my CSoFP?
March 14, 2016 at 6:29 am
Sorry Mike, I tried looking back to previous questions/comments, and am just a little more confused than I was before.
Is there any chance you can give me a brief description of how the the workings differ between your method, and the revaluation reserve you mention in the video?
March 14, 2016 at 7:12 am
For working W3 open a separate account specifically for the fair valued / revalued asset and put the fair value adjustments through that account rather than through the retained earnings
But I don’t understand why you cannot simply put the fair value adjustments through retained earnings as I have done
Isitin some way offensive to you to include revaluation Gaines along with retained earnings?
It’s quick, it’s easy and it’s not worth worrying about even though technically the revalued fair value increases should be included as revaluation reserves
March 14, 2016 at 8:14 am
I greatly appreciate these lectures, as they are both engaging and interesting. I am also able to learn the material better than, and quicker than just reading study texts. Its not offensive, and was more oriented to satisfy my curiosity of the comments you made during the lecture.
Thanks again for your response, Mike.
February 15, 2016 at 9:55 pm
Just wondering if we loose any marks by putting the FV adjustments directly in the cons. retained earnings.
February 16, 2016 at 8:55 am
You need to put them through the goodwill calculation too
And if you’re talking about fair value adjustments as at date of acquisition, the only thing affecting the consolidated retained earnings is any post-acquisition change in that fair value adjusted asset.
Yes, I know! I put through the fair value adjustment as at consolidation date, and the (for example) depreciation on that adjustment since acquisition, and the fair value adjustment as at acquisition date.
But, if you think about it, the real effect of those three is simply to put through the (for example) depreciation on that adjustment post acquisition
Nevertheless, I shall continue to put through all three elements
Is that clear?
November 15, 2015 at 5:58 pm
Firstly just to say, thanks for the lectures, they are a huge help.
I have a question which relates to the fair value adjustments in the retained earnings. Your example makes perfect sense to me and I used this approach to try to answer question 2 part c of the December 2014 specimen paper. In that question you have to create an extract of the Equity section of the consolidated statement of financial position, however in the answer that is provided by ACCA they have not adjusted the retained earnings for the fair value adjustment of the item of plant. So now I am confused, unless I have misunderstood their question I cannot see the difference.
Guidance would be much appreciated, as I am now worried I will get this wrong in the exam. Please let me know if I need to post the actual question here, I was hoping you may be familiar with it.
July 3, 2015 at 3:59 pm
Many thanks to you and Open Tuition for your support.
I was trying to do example 11 of page 46 of the course notes using revaluation surplus. However, I just can’t seem to get to the bottom of it.
Could you please show me how?
I am not a great student, but would like to learn.
May 13, 2015 at 11:06 am
Hi Mike, How did we arrive at $18,000 for the depreciable non-current Asset over 5 years. plus can u please explain a real life example of a non-depreciable current Asset and their features and accounting procedures, entries
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