Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

Reader Interactions

Comments

    • None of that share premium relates to the post-acquisition period and that’s all we are interested in when it comes to consolidating the results of the subsidiary – just the post-acquisition movements

      And, at F7, there will NOT be any issue of shares by the subsidiary post acquisition

      Finally, if you want to be certain that I shall see your questions and be certain that I shall reply, please use the Ask ACCA Tutor F7 forum in future.

      It was pure chance that I happened to see this question in the general forum

      OK?

  2. Hi! I need some help with negative goodwill explanation.

    Suppose, NCI investment is valued by any non-proportionate method,and if we have negative goodwill in W2. Is the negative goodwill to be distributed among both Parent as well as NCI (In W3 and W4), or will it entirely be added just to Parent’s Retained Earnings in W3?

    Thanks.

    • Without looking at the question (it’s not readily available) in the goodwill calculation we need to include as retained earnings the brought forward figure of 20,000 + the pre-acquisition time apportioned profits for this year and if that’s 7 months pre-acquisition and 6,000 profit for this year then, yes, 3,500 is the figure to include in working W2

      OK?

  4. Hi Mike,

    I have a question on the consolidated retained earnings. Why wasn’t the $20,000 apportioned? I am assuming it’s for the whole 12 months, right: per the question it says retained earnings at 1 January, 2009, which is from the beginning of the year. I am a little bit confused, can you please explain?

    Many thanks

    • If 20,000 was already there at the beginning of the year, before we acquired the subsidiary, so in other words pre the acquisition, or in short form pre-acquisition, why would you time apportion it into pre and post?

      It’s all pre!

      • Thanks Mike it all makes sense now and of course the $6000 is brought forward from the previous period so that is apportioned! Great! thank you indeed. Have a lovely Sunday!

      • “and of course the $6000 is brought forward from the previous period so that is apportioned!” …… now that I don’t understand! If it was brought forward from the previous period, why would you time apportion?

  6. Hi Mike you are doing a great job here,
    I have a question regarding example # 10 while calculating goodwill why you didn’t apportion the amount of B/f into 20000×5/12 ?? whereas you have did the calculation of apportionment for 6000×7/12

  7. Hi Sir,

    Regarding the negative goodwill. I have few questions:

    1. Does the negative goodwill is considered as income or gain? how the double entry should be?
    2. Is that possible for negative goodwill to be remained in financial statement for more than one period ( a year period )? What is nature of negative goodwill?

    Thank you

  8. Dear Mike.

    I have a question in Example 10 in the lecture. When calculating W3, how come Premium is not included in “per q”(under Ingrida colume)? I thought the figure should be 26000+1500=27500 instead of 26000, because other reserves should be treated in the same way is retained earning.

    Thank you!

Leave a Reply