Please advise when will suggested answers for P2 be online?

The reason that the inventory adjustment affects BOTH the pre and the post acquisition profits is that the value of inventory as at date of acquisition is used in the calculation of cost of sales as at date of acquisition and therefore cost of sales for that pr period needs to be reduced by the fair value adjustment.

BUT, at the same time, that increased value of inventory is part of the cost of sales for the post acquisition period and therefore cost of sales for the post acquisition period needs to be increased by that fair value adjustment, thus reducing the profit for that second period.

Is that clear?

Now, the pup on the asset transfer. I cannot remember how I treated it in the recording, but the “new” treatment is to calculate the profit, deduct the appropriate depreciation from that profit element, and arrive at a net figure. That net figure represents the up to date position with reference to how much pup has NOT been used up by the passage of time. And it’s that figure (the net pup) which is used to make the adjustment to the retained earnings of the entity which has recognised this unrealised profit.- Dr Retained Earnings in the selling entity and Cr TNCA by this net amount.

Yes, I know, it’s the buying entity’s TNCA which is overstated – so why do we credit in the selling entity’s records?

Ask yourself, is there any difference between 40 + 50 – 30 (=60) and 40 – 30 + 50 (=60)

What IS important is that the adjustment is made to the appropriate Retained Earnings figure because THAT will potentially affect the nci calculation

All clear?

I have gone over question 1 on consolidation named Austra and Danute. I have difficulty to understand the reason for not accounting the fair value adjustment on stock in the calculation of goodwill. In fact, when should we include fair value adjustment in the calculation of goodwill? Secondly, the reason for adjusting both pre-acquisition and post acquisition profits with the fair value adjustment on stock of 12,000. Thirdly, your comments on the treatment of PUP on the sale of PPE amounting to 36000 in the calculation of profits for consolidation?

Thank you

Besides …. what are you going to do about it now! Enjoy your life for the next two months and then take whatever result the marker gives you. There’s certainly no point in beating yourself up about something you cannot affect in any way

can you not access the exam through the opentuition site?

THAT’S SPOOKY!!!! I’ve managed to upset your girlfriend …. from this distance? Normally people only get upset with me when we actually meet! Give her a message from me – “Chill, girl”

And for you – just good luck today and stay calm. Remember all you have ever heard about exam technique and apply it! And maybe we’ll meet again at P7

blank pages don’t help no one