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ACCA F3 Group Accounts – Further Points

VIVA

View ACCA F3 / FIA FFA lectures Download F3 notes


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Comments

  1. tauqeer1996 says

    May 25, 2018 at 1:56 pm

    Which of the following statements, if any, are correct in relation to accounting for associates?
    (1) Equity accounting will always be used when an investing entity holds between 20% – 50% of the equity shares in another entity.

    Sir why is this statement incorrect?

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    • John Moffat says

      May 25, 2018 at 5:51 pm

      You must ask in the Ask the Tutor and not as a comment on a lecture!

      However, I do explain in the lecture that we only account for associates if there is also a subsidiary. If there is no subsidiary then we do not equity account for associates.

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  2. aliciajanet62 says

    November 20, 2017 at 4:43 pm

    Thanks alot

    very helpful

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    • John Moffat says

      November 20, 2017 at 6:39 pm

      Thank you for your comment 🙂

      Log in to Reply
  3. @47@ says

    June 20, 2016 at 1:57 pm

    We know that an associate have between 20% – 50% of shares and for more than 50%, it is a subsidiary. But then how shall we differentiate between a parent and subsidiary if for eg company A has invested 51% of shares. ( by definition it could be both a parent and a subsidiary, right?)

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    • John Moffat says

      June 20, 2016 at 3:23 pm

      You can have A owing more than 50% of B and then B holding more than 50% of C (and then B is a subsidiary of A but the parent of C).
      However things like this are dealt with in Paper F7.
      In F3 you will only have a parent owning a subsidiary.

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  4. bellanystewart says

    May 12, 2016 at 2:54 am

    Thank you so much for these lectures

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  5. Sali says

    March 7, 2016 at 2:40 pm

    Thanks Sir for your brilliant lecture.

    But, what is the treatment of inter-entity transactions (goods sold at a profit) do we eliminate when comes to consolidation?

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    • John Moffat says

      March 7, 2016 at 3:12 pm

      They are eliminated on consolidation (and there is the PURP adjustment if any of the goods remain in inventory).

      Both points are dealt with in the other lectures on consolidations.

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  6. saim says

    April 2, 2015 at 3:28 pm

    Dear john What is the difference between associate and simple investment?

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    • John Moffat says

      April 2, 2015 at 11:25 pm

      An associate is where one company has significant influence over another – usually where they own between 25% and 50% of the shares.
      It is only relevant if the company owing the shares is already producing consolidated accounts because they also have a subsidiary.

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  7. elaine says

    March 31, 2015 at 7:38 pm

    Hello I went through all the lectures on consolidation and found your teaching method to be really good. Do u specifically do consolidation for f7 also

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  8. Irum says

    March 10, 2015 at 7:07 am

    Dear John,
    Acca become easy for me just because of you. I do not have words to appreciate you.

    Kind regards,
    Irum

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  9. dj-drani says

    October 12, 2013 at 9:36 am

    Hey Big up, and kudos to the team at Open tuition, for I have just passed my F3 paper with a cool 70%, solely relying on the works and lectures on Open tuition.
    Advice to any student: believe in Open tuition and you will make it.
    True to the cause of Open Tuition, best things in life are free.

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    • John Moffat says

      October 12, 2013 at 10:06 am

      Thats great – congratulations 🙂

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  10. Pranesh Ramalingam says

    August 27, 2013 at 3:50 pm

    Mr. Moffet, What if a company P has exactly 50% of shares of Q?

    A subsidiary or Associate

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    • sally925 says

      September 26, 2013 at 10:38 am

      I have the same question..

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      • MikeLittle says

        September 26, 2013 at 10:56 am

        IFRS 10 now takes care of this – even though the big shareholder does not have >50% of the votes, IFRS 10 talks about effective control. Providing the distribution of the remaining shares is relatively widespread, then our 50% holder has effective control and the investee would therefore be treated as a subsidiary

      • sally925 says

        September 26, 2013 at 1:16 pm

        THANK YOU SO MUCH SIR! 😀

      • MikeLittle says

        September 26, 2013 at 2:02 pm

        You’re welcome

  11. katesafire says

    December 31, 2012 at 4:58 pm

    HI there ,
    I am not sure if 100% correct but i think i have some answers for these questions

    Q:1 I believe you are saying that for example company A has 51% shares in company B, then company B will have remaining 49% shares which will make it a subsidiary.

    Q:2 even if company A has less than 50% shares in company B , if it has more than 50% voting rights than it will be the parent cause all the financial n operational decisions of B will be in “control” of A
    ( one more to add is that ordinary shares carry voting rights so , if 50% ordinary shares then 50% voting rights, but the condition you are stating can also exist )

    Q:3 share premium comes from share capital because when we record share capital we also record the corresponding share premium for the same number of shares so , if a company owns 51% of ordinary shares then it will own the same percentage of share premium . Now if we calculate it as
    51%*100K +51%*50K= 76.5K which is 51% of 150K

    I am not sure if these will help you , but if they do then I am glad .

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  12. nzeadall says

    December 9, 2012 at 1:49 pm

    Thank you very much Open Tuition team, very nice lecture, however I have 3 questions, I’ll be very grateful if someone could help me on them:

    Question 1: We know that an associate have between 20% – 50% of shares and for more than 50%, it is a subsidiary. But then how shall we differentiate between a parent and subsidiary if for eg company A has invested 51% of shares. ( by definition it could be both a parent and a subsidiary, right?)

    Question 2: We are aware a company can control even if it has less than 50% voting rights as long as the mentioned conditions (pg 165) are met. Suppose in a question where the conditions are not mentioned but it says a company owns less than 50% of share capital, but more than 50% of voting rights, does it still have control as parent?

    Question 3: If ordinary share is $100K and share premium is $50K, a company owns 51% of ordinary share and only 5% of prem share, the overall ownership is less than 50% of the total capital amount (51% * 100K + 5% * 50K) = $53500 out of $150K, does it still control as parent?

    Thank you

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  13. cameron says

    April 9, 2012 at 10:53 pm

    all consolidation lectures very helpful

    Log in to Reply
  14. ridwaan19 says

    March 27, 2012 at 7:33 am

    nice lecture…:)

    Log in to Reply

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