- This topic has 3 replies, 2 voices, and was last updated 6 years ago by
.
- Posts
Question 31; Gain at disposal was calculated to be $4,400. I am so frustrated failing FR 2 times 40% and 48% . This is not acceptable because i did FA1 , FA2 and FFA. This has given me solid background in financial accounting & reporting.
On what sense does the examiner had to add NCI value to the proceed? Proceed is proceed … i do not just get it because it does not make sense to me. NCI figure was gotten by deducting SNA figure at acquisition from SNA Figure at disposal ( $26.1 – $19.8m). and taking the 20% of the remaining figure. Why?
From 2016 to 2017 , i have been listening to JOHN and i cleared all his papers apart from F5.
The total worth of the company at acquisition is the combination of NCI + Cost + Goodwill. Removing goodwill we can arrive at the Subsidiary net asset.
The goodwill 4.3 million was at acquisition, why will this value be added to the subsidiary net asset at disposal just to get the gain at disposal? Does that mean same goodwill was not included in the subsidiary net asset before been sold out? was goodwill never improved since the parent bought the 80% share ?
at acquisition, SNA @ acq was $19.8m
at disposal SNA was $26.1m
Proceeds of Subsidiary was $28.64m
gain at disposal ?( proceeds less CV for any asset).
IF i sell a thing … do i have to add the value of third party value (NCI). Before i sell a thing i must have added all costs which will determine my price objective. It does not make sense adding gain to operating expense.
Hi,
I’ve just looked at the Sept/Dec 2017 paper and it doesn’t appear to be the question you are referring to. Can you please just check that you’ve the correct dates/names?
Thanks
Sorry please , march/June 2018.
Question 31; Gain at disposal was calculated to be $4,400. I am so frustrated failing FR 2 times 40% and 48% . This is not acceptable because i did FA1 , FA2 and FFA. This has given me solid background in financial accounting & reporting.
On what sense does the examiner had to add NCI value to the proceed? Proceed is proceed … i do not just get it because it does not make sense to me. NCI figure was gotten by deducting SNA figure at acquisition from SNA Figure at disposal ( $26.1 – $19.8m). and taking the 20% of the remaining figure.
From 2016 to 2017 , i have been listening to JOHN and i cleared all his papers apart from F5.
The total worth of the company at acquisition is the combination of NCI + Cost + Goodwill. Removing goodwill we can arrive at the Subsidiary net asset.
The goodwill 4.3 million was at acquisition, why will this value be added to the subsidiary net asset at disposal just to get the gain at disposal? Does that mean same goodwill was not included when we accounted for as the subsidiary net asset before been sold out ?
at acquisition, SNA @ acq was $19.8m
at disposal SNA was $26.1m
Proceeds of Subsidiary was $28.64m
gain at disposal ?( proceeds less CV for any asset).
IF i sell a thing … do i have to add the value of third party value (NCI). Before i sell a thing i must have added all costs which will determine my price objective. It does not make sense adding gain to operating expense.
Hi,
The gain on disposal is that measured in the group accounts, so we compare the total value of the subsidiary to the value of the subsidiary’s net assets that are being disposed.
It is important that you do not just deduct the value of the investment from the proceeds as this is looking at the legal form in the individual accounts of the parent. In the group accounts we are looking at the substance of the transaction.
The value of the subsidiary is not just that of the proceeds as that is just reflecting the disposal of our ownership share, we therefore need to add the NCI to this figure to get the 100% value of the subsidiary.
Once you’ve got this we then deduct the net assets at disposal and the goodwill at disposal.
Try it and see how you get on.
Thanks
- You must be logged in to reply to this topic.