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FA Chapter 23 Questions Group Accounts The Consolidated Statement of Financial Position (2)

VIVA Subject Guide
 

43 Comments

  1. kobby
    Hello. For q4 why is the fair value of the non controlling interest used to find goodwill?
  2. John MoffatTutor
    Because we need the full value of the subsidiary for the calculation. Have you watched my free lectures on this where I do explain it?
  3. Dilara
    Hi, the 3rd question confused me. Why are we also calculating 10% of 24,000? If that’s the case, then why aren’t we doing the same in question 5?
  4. John MoffatTutor
    In Q3 the acquisition was on incorporation. In Q5 it is later.
    Have you watched our free lectures on this?
  5. Nayana
    100%
  6. rahym
    sir there was no NCI in q1 then why did you add 24000x10%
  7. John MoffatTutor
    But there is NCI. The first line of the question says that X bought 90% of the shares in Y. So the other 10% must be owned by the NCI.
  8. rahym
    alright thankyou sir
  9. John MoffatTutor
    You are welcome :-)
  10. Wasim
    Yeey!! 100% .So proud of myself..Thanks Mr. John Moffat
  11. John MoffatTutor
    :-)
  12. Vinayak
    Sir In the question there are no Non current intrest but you add the NCI 10%*24000. In which method are you calculated.
    Reply me
  13. John MoffatTutor
    I do not know which of the questions you are referring to.
  14. TAKUDZWA
    very informative lectures and i learned an awefull from the tutor
  15. John MoffatTutor
    Thank you for the comment :-)
  16. sallomani
    The Notes, and the video lectures, are as simple as they should be, and we are fortunate in having access to such useful resources. Thanks to OpenTuition, and thanks to the learned Tutor, Mr Moffat!
  17. sallomani
    That's right, Sir, we should do that. However, having said that, we also need to appreciate the fact that these quick checks are indeed very helpful in making sure we have correctly grasped what's been explained in the videos. Thanks to OpenTuition, and thanks to the learned Tutor, Mr Moffat!
  18. Francisca
    Thank you so much well explained got it all
  19. Naiya
    Hi...in question 1 you used share capital of y??? U said we have to use share capital always of the parent company which is 62000.. please explain why u used the share capital of subsidiary company..
  20. John MoffatTutor
    I do not say that at all !

    When calculating the goodwill we take the consideration paid + the fair value of the NCI and subtract the net assets of Y at the date of acquisition (which equals the share capital + reserves at the date of acquisition).
  21. rahmatbakhshi
    Hello sir, The questions were not so much complicated as I faced on Kits published by KAPLAN and BPP, by the way, thanks a lot.
  22. John MoffatTutor
    These tests are just meant as quick checks as you work through the lectures. That is why we say it is vital that you have a Revision Kit from one of the ACCA approved publishers!!
  23. sallomani
    That's right, Sir, we should do that. However, having said that, we also need to appreciate the fact that these quick checks are indeed very helpful in making sure we have correctly grasped what's been explained in the videos. Thanks to OpenTuition, and thanks to the learned Tutor, Mr Moffat!
  24. zuhal
    It was very useful, thank you Sir.
  25. John MoffatTutor
    Thank you for your comment :-)
  26. Patricia
    again I got 100 woow let me practice more using bpp and Kaplan thank you sir moffat
  27. John MoffatTutor
    Well done :-)
  28. Francisco
    In Q5, 100% of the share capital of Apple is considered in the non-controlling interest amount (instead of 30% as I incorrectly assumed ), however, in Q3, for the non-controlling interest we do apply only the percentage that is not controlled (10%). Does it have to do with the incorporation date? I did watch the lectures before attempting the practice question but I find this a bit confusing now.
    Many thanks in advance.
  29. John MoffatTutor
    But 100% of the share capital of Apple is not considered as the NCI. The NCI is the value of it at the date of acquisition (40,000) plus the NCI's share (30%) of the earnings of Apple since the date of acquisition - exactly as I explain in the lectures :-)
  30. Francisco
    Thanks, I think I see now where I went wrong.
  31. John MoffatTutor
    You are welcome :-)
  32. laufa
    Hi. In question 4, i don't understand why we are taking the whole 50000 of share capital instead of 70 percent of it. I always assumed if the parent company does not own 100 percent of the subsidiary then they shouldn't take the whole amount rather the controllable percentage amount. please explain :)
  33. John MoffatTutor
    When calculating the goodwill, we compare the total value of the subsidiary at the date of acquisition (the cost of the parents share, plus the fair value of the non-controlling interest), with the total book value of the assets of the subsidiary at the date of acquisition (the full share capital of the subsidiary plus the full pre-acquisition retained earnings of the subsidiary).

    (We used to do it differently, but the 'rules' changed many years ago).

    I do suggest you watch the free lectures - this is all explained in the lectures (and you really should watch the lectures before attempting the tests).
  34. malunde
    It is good quiz . it gives me more challenge .
    I need to more exerces.

    Thanks
  35. John MoffatTutor
    You must buy a Revision Kit from one of the ACCA approved publishers - they contain lots of exam standard questions to practice on, and practice is vital.
  36. Isaac Chiyaze
    How many questions on consolidations are expected from the actual exam
  37. John MoffatTutor
    Certainly 1 question in Section B, and likely several questions in section A.
  38. iffi457
    If Y was acquired at a later date after incorporation then would it be wrong?I was confused as in questions they give you the value of NCI at date of acquisition and you have to add it to the consideration.
  39. John MoffatTutor
    If the acquisition was at a later date, then yes - you would be given the fair value of the NCI.
  40. iffi457
    thank you
  41. John MoffatTutor
    You are welcome :-)
  42. iffi457
    In question 1 why did you multiply 24000 *10% and called that value Non Controlling Interest.24000 is the share capital is it always like this i have seen that in questions they give you the value of Non Controlling Interest?
  43. John MoffatTutor
    The 2,400 is the fair value of the NCI at the date of acquisition. Because it was acquired on incorporation the fair value of the NCI was simply their share of the share capital.

    Have you watched the free lectures on consolidations before attempting the test?

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