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Should we somehow consider ‘our’ portion (1/6) of current liabilities?
Sorry, forgot to mention, in equity method.
@olkhova, I do believe that in fact we DO – our share is the share of net assets, not just assets. And there’s now of course no need to specify that we are using the equity method, since that is now the ONLY method allowed. Proportional consolidation of joint ventures has been removed as the benchmark treatment and now the equity method has become the only method ( instead of being the allowed alternative )
I’ve also amended my way of calculating W5A Investment in Associate. I now tackle it in the same way as I do for a nci in a consolidation – because we ARE the nci in an Associate.
So now it’s:-
Value at date of acquisition ( or when it became an associate through part disposal of a subsidiary ), plus
Share of post-acq retained, less
Is that ok?
@MikeLittle, Many thanks for your clarification!
you are a blessing for acca students
May God bless you
To calculate Financial position in EQUITY method..so our answer should be base on video SOFP answer or benchmark answer? Thanks!
why do we take cost of investment 20000 in working 5 when actually we paid 120000 ….?!?!?!?!?!!? :s
@hasankhan, Because we only own 1/6 th ot the joint venture
I cannot access this video, and only this video, the screen shows that the service and network failed or the format is not supported.
Could you help fix the problem?
In calculating the W3( consolidated retained earnings, can you explain how the pre-acquisition profit was calculated as £20000
To get 20,000, he deducted 80,000 share capital from total pre-acquisiton net assets of 100,000. Since, Net Asset is the addition of Share Capital and Retain Earning.
Hope I got u question right!
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