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  1. Sir 46 page Example 1,
    J D
    Retained earning 200 30

    but in the working in the answer sheet,

    they indicate only 200,000 as the fair value of subsidiary net asset in Goodwill working.

    in my calculation,
    Acquisition date Reporting date post Acquisition
    share 200k 200k

    Retained earning 30k 30k

    230k( Fair value of subsidiary net asset )

    why there is only 200k in Goodwill working rather than 230k?

    even acquistion date is the same as the reporting date.

    • This should be on the Ask ACCA Tutor page!

      Here’s the first line of the question

      “Jurate acquired 70% of the share capital of Dovile on its incorporation.”

      What do you understand by that sentence?

      Post your response on the Ask ACCA tutor forum – that way I shall be guaranteed to see it

      Incidentally, I noticed an earlier post from you about there being various errors in the notes but “we are professionals so let’s move on” (or similar comment)

      Could you let me know where these various errors are?

      • Okay sir at first,
        Goodwill is not $20
        If i saw clearly.
        Goodwill should be written as $20,000.
        Yes it might have been considered as a trivial miss type.

        But. Such a person like me who don’t want to check answer sheets can be distracted.

        On the top of that, in number 6th, actually for the working, the period should be only 4 months but the period from acp and reporting date is actually 16 months.

        I was… bit mad for the fact that i wasted a lot of time thinking of why these figures came out…..

        Sir i might have had wrong answers or complaints and i am not as smart as other members, so if I’m wrong, hopefully u generously understand your apprentice.

        I always appreciate your free lectures, i am afraid that u think I’m arrogant. It’s not true. I am honor to listen to your lectures but hopefully all lectures are accordance with the note they uploaded especially page and some examples.

        Thank u

      • Those first 2 I already know about and they are on the list for amendment

        The last one – goodwill >>>>> goodwill impairment? Which question?

      • These are all i found as errors.
        Goodwill impairment should be written as 2000.
        The period for 16 months should be fixed as 4 months.
        Sir u said these are in your amendment list.
        But still there is no amendment in the test paper on my screen.

        So i was really confused when i tried to solve these questions, cuz no one let me know these errors before trying.

        As i answered to your last question sir, i said goodwill in my comment, so i fixed it as goodwill impairment sir.

  2. Hello Sir,

    I have been assigned the responsibility of preparation of consolidated financial statement. The standalone financial statement of both the parent and the subsidiary companies have been audited. While consolidating, I found that the balances of current account of the subsidiary company in the books of parent company and the current account balance of the parent company in the books of subsidiary company were not equal. The reason for that being that the subsidiary company had not reevaluated the balance payable to parent company at the year end using the closing rate (since the transaction was made in foreign currency and was foreign currency monetary item that needed to be revaluated at year end). However, the amount was reevaluated by the parent company correctly. Since the financials have been audited, how will I consolidate the balances since they dont agree with each other? Can I change the amount of profits and the balances in the consolidated financial statements?

  3. Please help. I watched all the videos for chap 7 last week but can’t access it and most of the other videos today. The intodution videos work for some reason. I am messaging from my phone because I can’t access this page and chat forums from my computer.

      • Okay sir at first,
        Goodwill is not $20
        If i saw clearly.
        Goodwill should be written as $20,000.
        Yes it might have been considered as a trivial miss type.

        But. Such a person like me who don’t want to check answer sheets can be distracted.

        On the top of that, in number 6th, actually for the working, the period should be only 4 months but the period from acp and reporting date is actually 16 months.

        I was… bit mad for the fact that i wasted a lot of time thinking of why these figures came out…..

        Sir i might have had wrong answers or complaints and i am not as smart as other members, so if I’m wrong, hopefully u generously understand your apprentice.

        I always appreciate your free lectures, i am afraid that u think I’m arrogant. It’s not true. I am honor to listen to your lectures but hopefully all lectures are accordance with the note they uploaded especially page and some examples.

        Thank u

  4. DEFERRED CONSIDERATION ON PARENT ACQUISITION OF SUBSIDIARY

    The parent acquired 75% of the subsidiary’s 80 million $1 shares on 1 Jan 20×6. It paid $3.50 per share and agreed to pay a further $108 million on 1 Jan 20×8. The parent company’s cost of capital is 8%. In the financial statements for the year ended 31 Dec 20×6 the cost of the combination will be as follows :

    80 m shares * 75% * 3.50 210
    deferred consideration:
    $108m * 1/1.08 100

    total 310

    QUESTION

    Mr. Little, i can’t figure out how they got 100 on the deferred consideration. To calculate a discount figure, don’t you need the initial investment($108), the cost of capital(8%) and the future cash flows?. Your assistance will be deeply appreciated as usual.

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