IFRS 13 Fair value measurement
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on the consolidated statement of financila position why was inventory fair value adjustment not include on other assets
Which question?
am sorry sir its example 11 chapter 7.Or am i right if its because there is no inventory at the end of the year thus why there is no adjustment,
Dear Mr Mike
1.Why would you not deduct the extra depreciation of 12 from the groups retained earnings especially if they have not been accounted for by the subsidiary.
Would it not be prudent to account for the depreciation expense due to FV adjustment.
2. If there is a FV adjustment in the subsidiary then should we not create a revaluation reserve when consolidating and decrease it by the excess depreciation.
Hope for a reply!
Much obliged
IF I’m on the correct question, is the extra depreciation not 9 (36 / 4)
The 9 IS accounted for by reducing the selling company’s retained earnings by the NET pup (if I’m on the correct question)
I suppose it depends what the fair value adjustment relates to. Yes, I could see the argument that says it’s a revaluation. Frankly, I’m not so sure that it matters whether you include it within retained earnings or show it separately as a revaluation reserve
apart from learning the drill of 4 workings
there are also things to learn which are based on accounts knowledge
but you did not cover all of them, and left to students effort.
Am i right. and u want to practice us to do.?
I thought that I covered pretty well all the important areas within the lectures but, yes, there’s got to be some left for your own input and practice is a key ingredient of this
Please Mr Mike, how did you arrive @ the 85000 pre- acq. Retained earning? I guess is the 20000 plus fair value adjustment of 65000. kindly explain, thanks.
Yes, that’s it. You can find the figure for pre-acq, when preparing W3 Cons Ret Ears, by looking in W2 Goodwill. The FV of SNA @ DOA in W2 comprises S’s share capital, share premium and (basically) retained earnings as adjusted for fair value adjustments.
The thing you must be careful about, though, is that you don’t pick up for the pre-acq figure the full fair value SNA. The figure you need for W3 is just the Retained Earnings figure as adjusted for the fair value changes
Is that clear?
Thanks alot Uncle MIke,now I understand. God bless you .
Thanks..hope to pass
Hi Mike,
thanks for your time and efforts on this.
Could you please explain why in the case of shares valued say at $1.50 just before acquisition, this valuation is not included in the W2 calculation of the FV of SNA at DOA( i.e the $1 shares will now be included as $1.50) rather you stick to the Balance sheet value, but then, you use the revalued NCA in that same calculation, why not stick to the book value also. However, this newer shares figure is included in calculating the NCI’s value @ DOA
The market value of shares has NOTHING to do with the company – it’s dependent upon supply and demand in the market and on market sentiment. The market value information is there only for the purposes of valuing the nci on a full, fair value basis.
The fair value of the subsidiary’s net assets is their book, carrying value as adjusted for any fair value re-assessments and the book value of net assets is the same as the company’s figure for shareholders’ equity
And shareholders’ equity is share capital + reserves
Is it okay only to listen to these lectures and not read the text book? I hardly have any time left. After listening to these lectures, am planning to practice the exam questions. please reply.
Be careful of this approach. I was in the same situation as you for Dec-12 session, I used only these lectures (but practised not enough) and I failed.
However, for F5 it was ok. I passed using only opentuition resources.
how did you get 18 for the DNCA?
Sue 30,000/5 =6000 annually. Bought at the start of 2008 so at end of 2008 is one year & at the end of 2009 is another. We’re consolidating at the end of 2009. The asset is depreciated for two years 30000-(30000/5*2)= 18000. Carrying Value at the end of 2009 is $18k
Oh my goodness- I didn’t actually dream about the cons ret ears song!!!!!
*did*
Hi Mike,
I have a question regarding the Exampole 11 in chapter 7. I am listining your lectures and also using BPP book and just see that they do FV adj in W3 a bit different. And as much as yours explanation seems to be logical to me, the way they show in BPP book is easier to remember and no make mistake, but I do not fully understant why this can be that way.
Would you mind to have a look and explain it to me.
W3) D R
per question 360000 100000
FV adj (32000) (*) see below
pre acq (20000)
post acq 48000
DOA Movement YE
INventory 20000 (20000) –
NDNCA 15000 – 15000
DNCA 30000 (12000) 18000
Goodwill RE SOFP
The question is why this negative 32000 can be put in RE like that? hope my question makes sense.
Thanks,
Beata
OOOPS I can see that format of my typing has been changed. not sure if yiou can ready my notes now….
excellent!!
Has the inventory been sold at year end? Why was this not part of the FV adjustment on the consolidated retained earnings?
@ribberson, which question?
@ribberson,
It is an assumption, that hopefully Romuna has been sold its inventory (it is about 28th minute of the lecture).
And it is assumption that non-current assets are still in Ramuna’s FS.
@sangria9, Many thanks
how you got NCI(w4) 88900?
value @ DOA 64500
post retained earnings 14400
ans is 78900
@ginduja21, which question?
GUYS ,i hope yoy are all well.anyone with an idea/s on how best i can pass F7.this is the 3rd tym failing this subject.
Thank U…
Excellent lecturer!!
An Excellent lectures which have quite good improvement compared to the previous version of these notes. Only question is – what about Associates? Why there are no examples on how to do the consolidation with associates? We know that in exam besides subsidiary we will have to include in the consolidation Associate as well 馃檪
@noldis, We DO NOT consolidate associates instead we EQUITY ACCOUNT!!!
Thank you so much i am so happy with this vidieo lectures.
God bless you
That was great
I’m really finding these lectures very helpful.
God bless all the people behind this wonderful resource!!!