Changes in the Composition of a Group Example 4

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  1. Avatar of rubysaw rubysaw says:
    March 10, 2013 at 3:56 pm

    Dear Mike,

    Kindly explain why the fair value of the investment retained is 350k in W3B? Thanks

  2. Avatar of flexi flexi says:
    March 10, 2013 at 1:05 pm

    There is something major wrong with the solution given in the video ..First of all,Raimonda sold 60 percent of its 80 percent holding in Dainius..according to the solution in the video,R then is left with 40 percent which I say is wrong because it sold 60% of 80%,not 60% of 100%.This means it sold 60% * 80% which is 42% sold and therefore it is left with 80% minus the 48% sold which is 32%..In the printed solution,they use 32% which correct.So I feel the video solution is misleading as it is saying 40 holding left after disposal.

    Secondly,in the question the FV of the remaining investment is given as $250 000 hence no calculation required for this but in the video they are using $350 000 as the FV of remaining investment…I’m soooooo confused

  3. Avatar of duduniao2fly duduniao2fly says:
    March 5, 2013 at 1:45 am

    W3B, the FV of remainder is given $350000, how does come ?

  4. Avatar of duduniao2fly duduniao2fly says:
    March 4, 2013 at 8:44 am

    in the note
    R sold 60% of the investment in D for $350000
    but in the video , 40% is used , how does this come ?

  5. Avatar of aujula aujula says:
    November 13, 2012 at 10:35 pm

    In example 4 w3b you put down 80% off 690625 was sold. I thought they only sold half which would be 40% off 690625. I was guessing it’s as a result of them crossing the barrier and becoming an associate. I’m not sure please help clarify this

  6. Avatar of eoglasain eoglasain says:
    October 2, 2012 at 12:26 pm

    Just wondering how you split the RE and got 492. I understand about the 9mnths and 3mnths but i assumed I apportioned 500 between them, where did the eight go

    • Avatar of eoglasain eoglasain says:
      October 2, 2012 at 1:18 pm

      @eoglasain, Its ok. I figured it out. But just incase anybody else is wondering.
      37,500 is this years profit. you need to divide and apportion that between both time periods. So:
      37,500/12= 3125. * 3= 9375. That figure minus retained earnings 500,000= 490,625

  7. Avatar of emilyhudson emilyhudson says:
    June 15, 2012 at 4:21 pm

    Hello,
    Why is it that in example 3 (D and L) the loss on the disposal (£137,500) from working 3b was not included within retained earnings, but in this example, the gain (£127,500) has been included?
    Thanks.

  8. Avatar of irusikzolotusik irusikzolotusik says:
    June 13, 2012 at 5:12 pm

    Surely, Mike. Thaks.

  9. Avatar of irusikzolotusik irusikzolotusik says:
    June 13, 2012 at 3:10 pm

    Hi, everybody,
    could smb help me how carrying value disposed of in W3A (250,000) was calculated?

    • Avatar of MikeLittle MikeLittle says:
      June 13, 2012 at 3:42 pm

      @irusikzolotusik, I don’t have it in front of me but didn’t we sell half of our investment? And didn’t that investment cost us 500,000?

      If so, that’s where the 250,000 comes from – it’s half if 500,000

      • Avatar of vmngoc vmngoc says:
        June 17, 2012 at 6:35 am

        @MikeLittle, Dear Mike, thanks for your lectures. It helps me understand more clearly on consolidate and know how to do it. Just a small question about difference between Example 3 and example 4. When calculating retain earning, in example 3 (D and L) the profit in the parent was used while in example 4, the profits in the group was used.

        I guess that because in example 3, neither the parent keep the control nor association. Thus, the consolidated statements are the statements of the parent. It no longer invest in L, so the pre-disposal interest in L is also nil. Am I right?

  10. Avatar of nataliamkl nataliamkl says:
    June 6, 2012 at 10:21 pm

    Why do we need W3A calculation in this example? Is this used anywhere?

  11. Avatar of chamt9 chamt9 says:
    May 25, 2012 at 3:02 am

    i cant view chapter 4 videos, can someone assist

  12. Avatar of affera affera says:
    May 13, 2012 at 12:55 am

    Mike,
    everybody needs to know what would be the value of investment in associate ( on equity bases) in SOFP
    I guess its cost of remaining investment + share of retained earning since became associate right?
    if yes can you put numbers is it here?

  13. Avatar of affera affera says:
    May 13, 2012 at 12:40 am

    thanks you for doing it first together and then separate for BF and CF .
    Cox in previous exam it was quiet confusing , don’t know about other but for me it was,

  14. Avatar of M.I.Soofi M.I.Soofi says:
    November 3, 2011 at 3:44 pm

    well explained……….keep it up mike :)

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