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Change in a group structure

Forums › ACCA Forums › ACCA SBR Strategic Business Reporting Forums › Change in a group structure

  • This topic has 1 reply, 1 voice, and was last updated 9 years ago by danique.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • October 6, 2015 at 5:42 pm #275232
    danique
    Member
    • Topics: 3
    • Replies: 4
    • ☆

    P purchased 80% of the shares in S 4 yrs ago for $100,000. On 30 June it sold all of these shares for 250,000. The nest assets of S at the acq’n date were $69,000 and at the DOD were $88,000. 50% of the goodwill arising on acq’n had been written off in an earlier year. The FV of NCI in S @DO A was $15,000. It is grp policy to account for goodwill using the full goodwill method.

    Tax is charged at 30%

    Calculate the profit or loss arising to the grp on the disposal of the shares.

    I did :
    Proceeds of disposal. 250
    NA @ DOD. 88
    % sold. 80% (70.4)
    Goodwill sold. ( 23)
    Gain in group. 156.6
    Tax. (45)
    111.6

    I’m not getting the answer I’m suppose to….I know I made a simple mistake but I can’t put my finger on it…..could you please help me to clarify this issue thanks.

    October 6, 2015 at 10:12 pm #275267
    danique
    Member
    • Topics: 3
    • Replies: 4
    • ☆

    I realise why I’m confused is because the book is using the format for part disposal in the case of full disposal to calculate the gain/loss in the group.

    They are using :
    Proceeds

    Less: NA @DOD
    GOODWILL @ DOD

    ADD: NCI @ DOD

    In an exam sitting or even for the purpose of review leading up to the exam which one am I suppose to use for full disposal?

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    Posts
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