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March 2025 ACCA Exams

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  2. hey mike,
    im a bit confused about the retained earning and inventory.
    the parent sells to the subsidiary.and the subs again sells to the parent.so dont we have to give a share of unrealised profit to NCI? DR.Ret EArn 450 DR.NCI 150 CR inventory 600?

    also the retained earning total is 12,000 and the loss from the P/l a/c is 4600 which means 4600×6/12=2300 post acq profit of which 25% we allot to NCI and 75 % to Ret earning.

    what have i done wrong.
    thanks alot

  3. If Consolidated Statement of Income was asked for in the question, then the additional 100 should have been deducted in arriving at consolidated profit before taxation. If Consolidated Statement of Income was NOT asked for, then the additional 100 should have been deducted in working W3 in arriving at Consolidated Retained Earnings

  4. Hi, I can’t remember the question but I imagine the answer is something like….

    “….the fair value adjustment was not reflected in the records of the subsidiary and is only relevant initially for the computation of goodwill.

    The subsidiary’s records therefore show the unadjusted value of the asset and the subsidiary’s Statement of Income reflects the depreciation of that asset at its historic carrying value.

    The adjustment for the additional depreciation necessary because of the fair value adjustment is made in working W3 Consolidated Retained Earnings and that additional depreciation should be shown as a deduction from the subsidiary’s retained earnings as at the consolidation date”

    And you’re telling me that I didn’t do that? Give me a reference / time on the recording where I am working out W3, please

    • hi, yes you deduct depreciation in good will but but fair value adjustment had 100 extra depreciation when you do consolidation income statement you didnot deduct depreciation extra from revenue , may be iam wrong

      • yes thanks mr mike

        mr mike , in exam the examiner may ask me about accounting principles . for instance he may ask me.

        what IAS 32 say?

      • The examiner is not going to ask “What does IAS 32 say?” He may give a question which relates to IAS 32 but in that situation he will typically say “IAS 32 Financial Instruments: Presentation requires financial instruments to be disclosed in a particular way. With reference only to financial assets ……”

        OK?

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