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Winberry

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Winberry

  • This topic has 5 replies, 2 voices, and was last updated 1 year ago by Kim Smith.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • August 14, 2023 at 7:49 am #689869
    tomasm
    Participant
    • Topics: 12
    • Replies: 7
    • ☆

    Dear Sir

    Could you kindly explain the LPS investment audit risk from Winberry question September 2022.

    I understand that it should be equity accounted and not consolidated but what confuses me is this part from published answer which says There is no impact on net assets or retained profit of Parents FS.

    Kindly explain this

    Thank you

    August 14, 2023 at 8:12 am #689872
    Kim Smith
    Keymaster
    • Topics: 133
    • Replies: 8291
    • ☆☆☆☆☆

    It’s explained in the paragraph that follows your quote.

    In essence – to consolidate subsidiary is 100% of everything – less the NCI = Winberry’s share, which is the same amounts as under equity accounting. The difference is that under consolidation, control of assets (for example) is shown line-by-line – but under equity accounting you just have the overall effect.

    August 14, 2023 at 8:59 am #689876
    tomasm
    Participant
    • Topics: 12
    • Replies: 7
    • ☆

    Makes sense. So since it’s 50% that is why essentially impact remains same correct
    If Winberry had only 45 % in LPS it will affect the net assets value under consolidation and equity accounting

    August 14, 2023 at 9:24 am #689877
    Kim Smith
    Keymaster
    • Topics: 133
    • Replies: 8291
    • ☆☆☆☆☆

    No it could be any %

    100% – NCI% = Parent’s %

    A. For a business combination, P’s % is calculated under the acquisition method of consolidation (IFRS 3)
    B. For an investment in an associate, P’s % is calculated under the equity method (IAS 28)

    Both methods will give the same “net result” – the difference is how it is presented in SoFP/SoPL:
    A. Present line-by-line 100% – then deduct NCI (as a single amount)
    B. Present net amount as single line in each statement

    August 14, 2023 at 12:08 pm #689887
    tomasm
    Participant
    • Topics: 12
    • Replies: 7
    • ☆

    Thank you. That makes sense

    August 14, 2023 at 12:16 pm #689888
    Kim Smith
    Keymaster
    • Topics: 133
    • Replies: 8291
    • ☆☆☆☆☆

    You are very welcome!

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘Winberry’ is closed to new replies.

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