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  2. avatar says

    Mike, at the end of the lecture you said it effects both w3 and w4. for working 4 obviously it effects the amount of retained earnings to be apportioned between P&S but does the additional $50 get added to the NCI value? i.e w4 would look like
    Value of NCI x
    & Share of S post acq profits 325
    do we then add on the $50 of dividend it is to recieve?

    Thanks

  3. avatar says

    On p.52 in Example 3 it says about depreciations: “… with a full year’s charge in the year of purchase and NON in the year of sale”. Shouldn’t the depreciation surplus be 50?

    • avatar says

      @ silvikss,. Yes, i noticed that one too. Its the same principles whether 90,000 or 100,000 i guess, just the pup should have been 10 not 20. the double entry used 20 so CS of FP will still balance. Cheers

  7. avatar says

    Dear Mr Mike Little,

    FIRST OF ALL THANK YOU VERY MUCH FOR YOUR TIME AND EFFORT!!! I REALLY LIKE YOUR TEACHING STYLE.

    Is the answer in the course notes for example 3, chapter 8 correct (page 160)?
    I am asking due to the different approaches in your lecture and in the course notes in regards to the PUP and excess depreciation (Selling company / Buying company???).
    Shall we use the SELLING company ONLY in the exam, as mentioned in the answer to example 3???

    May I also ask you to always explain everything, as if all of us students wanted to achieve high marks. You mentioned in one of the earlier F7 lectures that certain figures could be written out as a Revaluation Reserve, but you did not go ahead in the end and proceeded with the figures in the W3 Cons. Ret. Ears calculation.. Since then I am wondering how to deal with the Revaluation Reserve.

    Once again. THANK YOU SOOOOOOOO MUCH!!!

    • Avatar of MikeLittle says

      The pup on an intra-group asset transfer should be adjusted in the SELLING company NET of the depreciation on the profit. It may be that the above lecture does it the old way where some was adjusted in the selling company and some in the buying company.

      It is now the case that both profit AND depreciation are adjusted in the selling company

    • Avatar of MikeLittle says

      “Goodwill Account” or the account in which you have recorded the acquisition – maybe an account called “Cost of Control Account” or “Cost of Acquiring Subsidiary Account”

    • Avatar of MikeLittle says

      @annz2020, There really isn’t a song for working 2.

      However, the working 3 song goes as follows ( H is the holding company, more commonly called the parent company these days, and S is the subsidiary. )

      “H’s own plus

      H’s share of S post acq retained less

      Goodwill impaired since acquisition ( just our share )”

      If there’s an associate involved then we need to introduce two extra lines – line 3 and line 5

      “H’s own plus

      H’s share of S post acq retained plus

      H’s share of A post acq retained less

      Goodwill impaired since acquisition ( just our share ) less

      Impairment in A since acquisition”

  14. avatar says

    Thanks admin for providing the YouTube link! I watched the vedio till 8 minutes and 37seconds left (where tutor says:”I made the figures up”), and it won’t go on any further…

    I also noticed that the answer shown in the vedio is different from that in the notes. Which is correct then?

    • Avatar of MikeLittle says

      @c0712, If I’ve said “I made the figures up” it’s because a student asked eg “Which page are we on?” or “Where are these figures from?”

      Now, before I started making the figures up, I will have said, for example “Say….” or “For example, if ….”

      …and that’s why the video is not consistent with the notes – it’s because I was making the figures up!

      • avatar says

        @MikeLittle, Thanks Mike, but I’m afraid I was misunderstood.

        I mean, for example 3 chapter 8, the answer you gave in the lecture is different from the answer given in the notes (December version).

      • Avatar of MikeLittle says

        @c0712, Ah, maybe! I used to teach the accounting entries for pups on TNCA transfers as entries in both the buyer’s and the seller’s records and that’s the way it is probably dealt with in the video lectures. I DID change the notes in the Summer, but I haven’t re-recorded to appropriate lecture yet.

        Sorry

      • avatar says

        So during the exam should we adjust both seller’s and buyer’s (the way its done in the video) retained earnings or just the seller’s (the way its done in the notes)?

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