Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Help with Calculation of Consolidated Reserves
- This topic has 4 replies, 2 voices, and was last updated 14 years ago by Anonymous.
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- April 27, 2010 at 12:44 pm #43643
Hi,
I have a question on consolidation, but I’m having a problem calculating the consolidated reserves, which according to the answer should be $13,156, can someone please help me by showing me the workings to get to that figure, I’ve uploaded the question to media fire, because I cant find the attach file button.
Thanks!
April 27, 2010 at 10:53 pm #59625AnonymousInactive- Topics: 0
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The $13,156 was made as below:
$14,000 (Penn’s reserve)
+ $800 (4/5 sharing of reserve at Speen)
– $1,200 (4/5 sharing of pre-acquisition profits at Speen)
– $160 (4/5 sharing of URP at Speen)
– $444 (Goodwill impairment)
+ $160 (40% sharing of post-acquisition profits of Amersham)Remarks:
Goodwill at acquisition of Speen: $7,500 – ($5,000 + $1,500 + $1,115 – $920) x 4/5
URP at Speen: $1,000 x (1 – 1/1.25)April 28, 2010 at 12:09 am #59626Awesome, this bit was driving me mad, thanks once again sosologos for taking the time to help me out, much appreciated!
April 28, 2010 at 11:05 am #59627Just one more question, what’s the reason for not including the fair value adjustment of land in the calculation? (920 > 1115)
April 29, 2010 at 12:24 am #59628AnonymousInactive- Topics: 0
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Fair value adjustment affects goodwill at acquisition. You can see that the $1,115 – $920 in the goodwill remark is to count in the fair value adjustment. In other words, fail value adjustment at acquisition, similar to pre-acquisition profits, will not affect group retained earning.
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