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ACCA F7 June 2008 Question 1 Patronic

VIVA

ACCA F7 past exams lectures Download ACCA F7聽Q&A


Reader Interactions

Comments

  1. ravinsingh says

    May 11, 2016 at 8:12 pm

    thanks sir

    Log in to Reply
    • MikeLittle says

      May 11, 2016 at 8:14 pm

      You’re welcome

      Log in to Reply
  2. Swati says

    July 31, 2014 at 11:43 am

    Dear Sir,

    My another doubt in this ques is regarding the depreciation.
    We have considered it into the cost of sales — is it because the ques says so? What to do if nothing is mentioned in the question. Do we then deduct it from G.Profit?

    Rgds,
    Swati

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    • MikeLittle says

      July 31, 2014 at 1:17 pm

      As mentioned below, a question will often direct you to “include depreciation, amortisation and impairments in cost of sales”

      That would be typical of the F7 examiner’s instructions.

      That’s probably why I included it there.

      If it isn’t specifically identified to you, I would be inclined to show it separately – but it will normally be identified!

      Log in to Reply
      • Swati says

        July 31, 2014 at 1:32 pm

        Thanks Sir.

        Understood.

      • MikeLittle says

        July 31, 2014 at 1:32 pm

        You’re welcome

  3. Swati says

    July 31, 2014 at 11:32 am

    Dear Sir,

    I am so sorry for the doubt related to ‘Finance cost’. I saw that later that you have added the subsidiary share also.

    Just the doubt of why goodwill impairment deducted from G.profits?

    Thanks,
    Swati.

    Log in to Reply
    • MikeLittle says

      July 31, 2014 at 1:12 pm

      Good news about the finance costs 馃檪

      Re the goodwill impairment – where else would you deduct it from? Quite often a question will say that any impairment is to be included within cost of sales.

      Otherwise, I feel that I would show it separately as an expense within the statement of profit or loss

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  4. Swati says

    July 31, 2014 at 11:22 am

    Dear Mike Sir,

    In this F7 June 2008 Question 1 Patronic, I have a few doubts:
    1) Why are we not adding the 8/12 of 900 (Subsidiary share) when we are talking about the Finance cost. You have just taken the Parent’s share & unrolled disct (i.e 2 +2.4)

    2) Secondly, why do we deduct the goodwill impairment from the Gross profits? Is it the rule & do we always have to deduct the goodwill impairment from Gross profits?

    Regards,
    Swati

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  5. tauraiversatile says

    November 29, 2013 at 2:44 pm

    I am happy, thanks Mike. However, the question reads differently from the one on the ACCA website…2 things, the one on the website is different from the one you are reading which is still different from the one in BPP revision kit. Kinda confused! Hope to pass, thanks once again 馃檪

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  6. rochyroch says

    May 29, 2013 at 3:41 pm

    Dear Sir;

    The ACCA answer does not include the 2 goodwill when doing W4B NCI

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    • MikeLittle says

      May 29, 2013 at 4:28 pm

      I don’t believe that goodwill fits anywhere into W4B. W4B is the nci share of this year’s subsidiary adjusted, time-apportioned profits after tax. Whereabouts are you trying to fit goodwill into that calculation?

      And why?

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  7. sarahlim says

    May 23, 2013 at 9:32 am

    Sir, can you help me to calculate finance cost ?
    coz the suggested answer included interest for deffered payment but i failed to calculate for it….

    TQ

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    • MikeLittle says

      May 23, 2013 at 12:23 pm

      The deferred consideration is $2 per share on 18 million shares = 36 million. That’s the present value. To unroll it, we take 36 million x 10% = 3.6 million. But it’s only unrolled for 8 months until the year end So the finance cost is 3.6 million x 8 / 12 = 2.4 million finance charge and that’s added to the long term liability of “Deferred payment”

      Ok?

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  8. sarahlim says

    May 23, 2013 at 9:27 am

    erm… somemore the goodwill is calculated as at 1/4/2007
    but for the impairment is at 31/03/2008 so cant calculate in the goodwill right?

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    • MikeLittle says

      May 23, 2013 at 11:54 am

      That’s what it shows in the video at 17.32

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  9. sarahlim says

    May 23, 2013 at 9:26 am

    Dear sir,

    same problem cant find the 30.5 of NCI investment n cant find it in the suggested answer too
    but usually v calculate the goodwill muz include for NCI right?

    Log in to Reply
    • MikeLittle says

      May 23, 2013 at 12:30 pm

      Point number (iv) in the Kaplan 2012 edition states “The nci has been valued at 30.5 million” and I believe that that was the source from which I prepared the answer. Kaplan were not allowed to reproduce the ACCA questions precisely so this must have been one of their “amendments”

      Sorry that this has resulted in your general confusion!

      Log in to Reply
  10. willie91 says

    October 23, 2012 at 1:15 pm

    can u adjust your handwriting its not that clear

    Log in to Reply
    • MikeLittle says

      October 23, 2012 at 2:27 pm

      @willie91, Sorry Willie – I’ll make a note “Must try harder”

      Log in to Reply
  11. marky123 says

    May 14, 2012 at 10:31 am

    Yes I calculated G/will to be 27,000 too. Im just wondering if Mike maybe using an old unmodified/modified version of the question from a text book maybe instead of ACCA ??
    Be interesting to know what that 30.5 was though 馃檪

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  12. marky123 says

    May 8, 2012 at 4:26 pm

    Hi just a quick one. In the video at 12m 40s, Mike writes in a figure of 30.5 bringing the total to 135.5. Where does this figure come from???? I cant see it or calculate it.
    Also, at around 17m, Mike gets Goodwill to be 29,500 yet ACCA standard answer is 27,000 ?? Why the differences?
    Any help appreciated thanks 馃檪

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    • e1e4 says

      May 13, 2012 at 9:57 am

      @marky123, I also can not find the figure of 30.5 .In the paper june 2008,the nci is 26m,so the calculation of goodwill is 27m.you can try it .

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      • jessiewong says

        October 11, 2012 at 2:43 am

        @e1e4, how to get the value of nci of 26m that u state ? what is the calculation step?

      • MikeLittle says

        October 11, 2012 at 11:29 am

        @jessiewong, Hi, I’ll look at it again and also at the video. But it will have to wait for a few hours – I’ll get back to you

      • nyarasi says

        November 6, 2012 at 9:48 am

        @jessiewong, to get the value of 26m u have to multiply 104m * 25% of nci [share capital 24m +retained earnings 73.5 +fair value adjustments of 6.5m = 104m]

      • MikeLittle says

        May 23, 2013 at 12:31 pm

        Ok, the Kaplan revision kit for 2012 , point number (iv) states that the nci is valued at 30.5 million.

        Sorry that this has resulted in confusion

        馃檨

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