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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.
That’s nice of you to say, thank you Rhona 🙂
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
OK, got it. Sorry 🙂
Sure? OK then 🙂
Would you be so kind to explain the same to me ? I din get it.
Its from BPP Study Text for exam up to June 2016, page 168 (the CSOPL & OCI) Brodick Co and its Subsidiary Lamlash co.
thank you, Darshap
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
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
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?
HI Mike, Yes much better! Thank you. sorry had forgotten to reply.
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
I need the full question – where’s it from? And what reference number or name is it?
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,
Is it possibly a dividend that has been accounted for but not shown in an obvious way?
don’t know, I’ll give it a go again. Thanks
Hi, In chapter 10 example 2 I dont understand why PUP is zero yet Lina sold to Sigimantas at goods worth 4000 at a mark up of 25% Kindly explain?
sorry got it. its because all goods have been sold.
In chapter 10 example 2 when you are working out group retained earnings why do you not add in proposed dividend receivable 60% x 5000?
Sir, should we include NCI dividends ($2000) in statement of IC (not $3,920 but $1,920) as it is shown in statement of changes in equity?
No, dividends are not an expense of a company. A dividend is an appropriation of profits, not an expense
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!
which chapter, which example?
chapter 10, example 2. The line before the requirement, ‘During the year Lina sold $4000 worth of goods at a mark up of 25% to Sig…’
Oooops, I had also worked out pup. I have only one question though, Mike, is it allowed if we just ignore inter group sale since they make no difference to arrive at Op profit?
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!
OMG the easiest and simpliest way of explaining how to do the statement of changes in equity!
Thanks very much for tis video Sir!
I dont understand, in example 2 in the St. of changes in equity why does NCI reduces Retained Earning. Does it always happens like this? Thanks in advance
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
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?
No, Statement of Changes IS in your syllabus, but not for consolidations, so it will NOT appear in question 1 – but probably WILL be in question 2
Mike, whats the trick is? While W3 you have not counted dividends receivables from Sigmantas. Why do we need to count it in, for instance, in Chapter 9 exercises? (Ch. 9 Ex. 1) Thank you.
@biskarre, I got it 🙂
Miss A.. says
very good lecture
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