Other components of equity – Example 3 – ACCA Strategic Business Reporting (SBR) lectures
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Hi Sir, regarding net assets of the subsidiary can you please reiterate on how you got the $400M and $ 225M under post acquisition. Thank you
Thank you soooooo much for increasing the size of the video playback window!!!!
If goodwill is impaired do we reduce the value of the goodwill by the impairment amount during consolidation? As it is only on consolidation that the goodwill is shown on the surface of the conso. SOFP. Thank you.
Thank you, very appreciate.
in case of impairment of goodwill in proportionate method we will account for only 80%.. am i right?
one thing i don’t get is in both methods we are adding NCI to Fv of consideration. so why is it different goodwill in both i mean in proportionate we are saying it’s only parent and in FV we are saying its for both.
from the lecture i just got the point that if NCI is at FV then it will be full good will..
i am not still getting logic that why one is proportionate and other is full even if we add NCI to consideration in both method.
Hey, not sure if you’re still looking for a reply. I was wondering the same thing as you. ACCA have a technical article on this:
https://www.accaglobal.com/ie/en/student/exam-support-resources/professional-exams-study-resources/strategic-business-reporting/technical-articles/impairment-goodwill.html
Using their method, which for proportionate method doesn’t include NCI, I actually got the same answer as above (which makes sense when you look at the calculation. Just the percentage of the parent’s share of N/A. The calculation above adds in the NCI and then takes away the full amount. Ultimately the same thing but for understanding I find it easier not to include the NCI. See calculation below. Hope this helps, best of luck in the exam!
Parent’s cost of investment $5400
Less the parent’s share of the net assets (80% x $3400) ($2720)
Goodwill attributable to the parent $2680
Hello Sir, in Example 3, for working of group retained earnings why have we worked out (80% x 400) only considering post acq. Of R.E. whereas in the Example 2 for the same R.E working we have considered full post acq. Profit.
Hi,
We are now bringing in the other components of equity in to the questions now, so any movement in the net assets of the subsidiary will constitute not just a movement in the retained earning as we’ve seen in previous examples but also a movement in the other components of equity.
When looking at the parent’s post-acquisition share we need to take the post acquisition share of profits/retained earnings to the group retained earnings working and the post acquisition share of other components of equity to the group other components of equity working.
Thanks
Hi Sir, in this we have calculated other components of equity and u mention there is a video on it. however i cant seem to find the video on other components of equity