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hello …sir in which situation we should charge the good will impaiment to NCI ..??
because you said in previous lecture that we will not charge good wiill impairment to NCI …when the NCI is proportionate basis…..
Correct – we only charge the nci with an impairment of goodwill when the nci is valued on a full, fair value basis. If they are valued on a proportionate basis, then they have no goodwill attributable to them, so we can’t charge them with any impairment
thank you sir…..you are great……
If people keep saying that, I shall start to believe it!
Good day Sir,
I am new on Open Tuition. Are there assigned times when you hold lectures?
I have registered for F4 and F7.
How does it work?
Hi Natasha, welcome to the opentuition family
There are a number of lectures for all papers video recorded and a number of others which are audio recorded.
We are all tutors active in teaching ACCA – opentuition is something we do in our spare time.
There are no live lectures on the site, only recordings
If you have any problems at all wih your studies, feel free to post your question on “Ask the tutor” and we will try to get back to you within 48 hours
Good luck with your ACCA and tell your friends about the site!
Thank you very much for your prompt response Sir.
I was trying to find lectures for F4 (Global Variant) but it seems like there is only the English Variant available?
hhah …have you doubt on yourself>?
Hi again Natasha
I think you’ll find that the English and UK variants are 50% – 60% the same so they should be helpful for you
Thank you Sir.
maat9, i’ve no doubt
Just worked Q-31 in the bbp kit. It has a Negative goodwill of $200.00 i see where they subtract from the admin expenses where i had just added it to the profits for the year.
Please clarify: are there situations where i less it from expenses versus just adding it to the profit for the year?
Not aware that one place is better than the other – unless the question directs you
Actually its fine silly mistake.I got it.
good – that saves me looking up example 6.
Sorry, example 7!
sorry i meant example 7.
Hi does anyone know how we get $55000 for example 6?
Wonderful lecture! Keep up the good work.
Is there anybody can answer my question ? Need help
I am studying ACCA paper7 Financial Reporting (International and UK stream). I have paid online exam entry.
I just have got one question when I needed to choose paper standard and variant because there are 3 options. I have chose “International” and I just wonder whether it is correct.
I’m the same and I chose Internatiional, as that is the syllabus that BPP teach where I was studying. If you are self studying there is no reason why you shouldn’t just do the UK variant – I have heard that it is slightly easier than international for some reason!
I can’t thank you enough. I wish I were in your classroom. You really cleared up the stuff, that my lecturer explained so complicatedly, into easy steps. Thanks!!
Goodwill impairment is allocated to both parent and non-controlling interest, valued at fair value.
Let me pick a simple example from 2012 syllabus page 146-147.
Attributable to: parent 19,250.00
When goodwill is impaired by 20%, this impairment is allocated according to their percentage of holdings (75%: 25%)
Impairment Parent (75%) NCI (25%)
23,000.00 @ 20% = 4,600.00 3,450.00 1,150.00
ASSUME GOODWILL IS IMPAIRED BY 75%
23,000.00 @ 75% = 17,250.00 12,937.50 4,312.50
In this case the deduction of NCI resulted by goodwill impairment (4,312.50) is greater than the goodwill attributed (3,750.00).
So, is it fair to allocate goodwill impairment according to percentage of holdings?
Impairment Parent NCI
23,000.00 @ 20% = 4600.00 (19,250.00 X 20%) = 3,850.00 (3,750.00 X 20%) = 750.00
Does it make sense?
the layout is not what I wrote in word file
Take the total goodwill (in your example it’s 23,000 x 20% = 4,600)
Allocate on the basis of shareholdings (in your example that’s 75%/25%) so 3,450 for the parent and 1,150 for the nci
Goodwill is now 18,400 and the retained earnings and nci have been reduced by 3,450 and 1,150 respectively.
Yes, it’s unfair (apparently) as I point out in the lectures but …… that’s the way it is
the syllabus says “good will can not be developed internally, rather it is valued when business combination occurs”.
so why do we attribute goodwill to NCI? where they do not develop goodwill internally?
@henahailu2, The nci only arises on the event of a business acquisition. Incidentally, I believe that your question is incorrect “…good will can not be developed internally…” and then you go on to say “so why do we attribute goodwill to NCI where they do not develop goodwill internally?”
The wording of your question suggests that we should not be attributing goodwill because it WASN’T developed internally.
Where goodwill is internally generated, we DO NOT recognise it. Goodwill is recognised ONLY on the event of a business acquisition and nci arise, again, ONLY on the event of a business acquisition
Example 6: Page 40, Question: Why do we own 8000 shares if Ilona? We own 25% @ 32.000 $ = 8.000 $ of share capital…Am I wrong??
@dtsolak, he was saying that we own 75% and the NCI owns 25% of those shares, being 8,000.
Great lectures. My only regret is that i discovered this site just some 20 days to the exam. Keep the good work going.
Why is it that we apportion the impairment of goodwill between the parent and the nci but we dont do the same for the goodwill.why does the nci not get part of the goodwill
@simbamasara, They do! NCI is measured at “value at date of acquisition + share of post-acquisition retained – their share of goodwill impairment” The value at date of acquisition INCLUDES their share of goodwill at date of acquisition.
An alternative way of calculating the nci is “their share of S net assets at date of Statement of Financial Position + their share of any goodwill which remains after impairments to date. Check it!
that s umbeliveble it sound so easy,hope it will carry on
U the best. Great Humour to!
You really make it seem easy…. thanks Mike.
thank you so much!!
really helpful thanks alot
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