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ACCA F7 Inventory sold at a profit within the group

ACCA F7 lectures  Download F7 notes

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  3. I want to thank you sir for all ur wonderful lectures, I am OT trying for my exam for the very 1st time and it is well pleasing. Please sir I want to ask u a question: WHEN THEY VALUE THE NCI ON A PROPORTIONAL BASIS IF THEY SAY GOODWILL IS IMPAIRED ARE WE GOING TO LESS THE IMPAIRED GOODWILL IN THE NCI(WK4) OR NOT. Thank you

    • Sannie, if you want a guarantee that I shall see your question and reply to it, please in future post your questions (not lecture related) on the page “Ask ACCA Tutor”

      In addition, please do not type in upper case!

      If the nci is valued on a proportional basis, that means that there is no goodwill attributable to them and, if there is no goodwill attributable to them, it would surely be unfair (and wrong) to charge them with any goodwill impairment

  4. I have been using the Kaplin books to work through the F7 syllabus and this topic in particular had me staring at the last few chapters clueless for the last couple of days. Clearly my thought process is not the same as those who write the book as their way of explaining this is often convoluted and hard to understand.

    Just wanted to say that your way of explaining things is just fantastic and makes so much sense.

    Great lectures, and thank you.

  5. Please Can u explain why we had to reduce the 12,000 inventory from the Consolidated balance sheet whereas we have added it back to the subsidiary we bought it from to cancel inter-group trading. Also why did we not apply the same principle to the liability where we may have the parables which have been reduced by 12,000 in order to cancel the inter-group trading. We did not even touch or bring in the effect of the adjustment into it
    Thanks

  6. you ‘re great..i pass f3 with open tuition)) now i hope will pass f7 with your help again..i have question about this example. Why we do not reduce 60 000 in other assets (as receivables) and liabilities (as payables) in CSofFP ??
    Thank you in advance..

  7. do we show this working as part of our working notes to show the examiner how we are arriving at the figures or do we just write in the question paper?

    And can we write notes on the question paper in our reading time to make it easier while solving?

  8. I was thinking the PUP deduction in the inventory value should be from the buying company, Petras. Is the 70,000 inventory value in Signe not the closing balance after the sales? Petra has received the goods and displayed it on its balance sheet at purchased price of 60,000 including the PUP. Mike pls kindly clarify sir. Thanks so much.

    • The question is not “Whose inventory is overvalued?” the question is “Whose profits are overstated?” and it’s the selling company that is overstating profits so far as the group is concerned

      Ok?

  9. Thank you for all the detailed explanations on the PUPs. I would have a question regarding the NCI computation, normally since the subsidiary is a completely different entity, from the point of view of the NCIs the profit was realized as the subsidiary has sold the goods (they don’t care whether these were sold to the parent or outside) . Shouldn’t the PUP affect only the Group retained earnings and not the NCI?

  10. Mike, you have a talent in making difficult things easy for people like us. You guys are a blessing to us. I have studied this things from several tutors and failed to really understand it, and I must say, you are the man. You are the magic man. with your lectures, I am solving all PUPS and the other consol questions with ease and speed.
    God bless you.

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