Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Consolidation : Parentis (J'07)
- This topic has 11 replies, 2 voices, and was last updated 10 years ago by MikeLittle.
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- March 22, 2014 at 6:47 pm #162825
Hello
The note (ii) to the question says :
The intellectual property is a system of encryption designed for internet use. Offspring has been advised that government legislation (passed since acquisition) has now made this type of encryption illegal. Offspring will receive $10 million in compensation from the government.
Question :
(i) Why isn’t the intellectual property derecognised in g/w calculation ?
Thank you.
March 22, 2014 at 7:09 pm #162827Because at the date of acquisition it had a value as it was still at that date considered viable and legal
March 22, 2014 at 7:44 pm #162834So the entries would be :
CR Intangible £30m
DR Cash received from government £10m
DR P&L (write off intangible) £20m ?March 23, 2014 at 6:14 pm #162866Yes, but remember, this affects the post-acquisition period’s profits
March 24, 2014 at 10:19 am #162920The question also says in note (iv) :
“Due to the impact of the above legislation, Parentis has concluded that the consolidated goodwill has been impaired by £40m.”
Does this mean that the remaining £20m w/o of the intellectual property is included in the impairment figure of £40m ?
March 24, 2014 at 6:38 pm #162944No, it’s written off against retained earnings in Parentis own figures. But the impairment is deducted from retained earnings and the nci in their proportions
Ok
March 24, 2014 at 8:17 pm #162948Yes.
If there were no reference to the change in legislation mentioned in the note which indicates that the impairment bore the above impact, should we have increased the impairment value to reflect this change?March 25, 2014 at 6:30 pm #163039You would not be expected to draw that assumption for yourself in the exam
The examiner will give you all relevant information
March 31, 2014 at 3:07 pm #163779Hello
In the CSoFP, for the ordinary shares , why does the ans say (300+75)? Where does this 75 come from?
I watched the lecture for this question but i didn’t get it.
Thank you.
April 1, 2014 at 3:43 pm #163902Did Parentis not issue 75 shares on the acquisition of the subsidiary, but the question tells you that this has not yet been recorded in the parent’s records?
Does that do it for you?
April 7, 2014 at 10:49 am #164603Yep thanx!
April 7, 2014 at 11:02 am #164607You’re welcome
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