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  1. Dear Mike;
    Thank you for helping me understand the Statement of Changes in Equity in relation to the Equity section of the Statement of Financial Position just at the end of this lecture – I was cracking my head over something as simple as you have presented it, you are a gifted teacher, you got me through F4 and now F7 is more understandable thanks to you! I will keep spreading the news about Open Tuition to all ACCA students – you & “the OT team” are a God-send! Thank you once again.

  2. Dear Mike,
    Chapter 10 Example 2. Would you be so kind as to explain why you have not accounted for dividends receivable from the subsidiary in W3 and W4. In example 1 you have.
    Thank you!
    Krisztina

    • I don’t have a BPP kit (nor a Kaplan kit either)

      The question loses understandability when your post gets onto the page and I cannot see the connection between – well – any of the figures that you’ve given me

      Do I assume that the first figure in each of the two lines is the dividend paid

      and the second figure is retained earnings brought forward

      so the third figure is retained earnings carried forward

      And where / what is 52,000. Is that profit for the year or is it the subsidiary retained earnings as at date of acquisition (before or after dividend allocation?)

      It’s too difficult to follow, sorry

    • Hi

      I’ve found it on the internet

      Which figure are you trying to prove to?

      Ignoring the dividend from Lamlash, Brodick’s own results for the year were 200 (pre dividend)

      Brodick’s share of Lamlash is 80% x 6/12 x 40 = 16

      So combined the profit figure is $316

      Or ….

      Brodick’s own (without the dividend from Lamlash) is 300

      Lamlash consolidated figures are 6/12 x 40 = 20

      Combined profits are $320 os which the nci want 20% x 6/12 x 40 = 4

      Is that better?

  4. Mike need your help again please

    Working with a Question to prepare SOPL to 30 April 2007
    AQ = 1 Nov 06 (mid-year, 6 months), RE @ aq 52,000

    Profit 30.4.07 Divid paid B/F RE
    Parent 324,000 200,000 460,000
    Sub 40,000 30,000 48,000

    Can’t manage to tie W3 and consolidated profit again

    as per Answer = Profit =320 with group’s share 316

    Thanks,

  5. Hi Mike,

    I’m stuck on a question from BPP Study text, where they have given us an extract of the SOCIE, where we have O/B and Closing balance for RE but using your method I cannot tie back the RE to the Comp. income statement or Profit figure from W3

    Do you think you will be able to help?

    Thanks in advance,

  9. Instead of deducting 4000 from each revenue and COS..shouldn’t 5000 have been deducted? Surely the sale was made at 5000 so if I deduct 4000..wouldn’t that make my revenue overstated by 1000?
    Please sir Mike need your help!

    • Sure it’s allowed. However!!!!!! You will lose the marks available for cancellation of the intra-group trade! Why would you want to ignore it – it must be one of the easiest bits of all the consolidation adjustments!

    • Yes, the full profit for the year goes into Retained Earnings but, of course, the nci want their share of these profits so the transfer from Retained Earnings to nci will reduce Retained Earnings (if the year’s results had shown a loss, the nci would have been charged with their share of that loss)

      Hope that helps

  13. Brilliant lecture!

    I finally understood that the figures in this Statement of Changes in Equity are the same figures that will appear in the Consolidated Statement of Financial Position. Thank you Sir Mike.
    I would just like to ask whether it is possible that we will be asked to draw up a Consolidated Statement of Changes in Equity in the context of Question 1. Has this been asked before?

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