Group Accounts The Consolidated Income Statement part a - ACCA Financial Accounting (FA) lectures
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16 Comments
M
Moreblessing·
IN EXAMPLE TWO IN PART A WHY WAS THE ATTRIBUTABLE TO NON CONTROLLING INTREST (40%×8000) ONLY INSTEAD OF {40%×(17000-8000)}whereby 17000 is the subsidiary company's current retained earnings less 8000 which is preacquisition profit to get 9000 which is post acquisition profit times 40 %
H
Hajar·
Hi, in exemple 1
Why didn't you take the 20% retained earnings from S for NCI?
J
John MoffatTutor·
The consolidated SOPL itself is only showing the profit for the year and not the previously retained earnings.
The movement on retained earnings is only showing the retained earnings of the group and not of the NCI.
J
John MoffatTutor·
I don't understand what you are asking. You should be attempting questions in a Revision Kit from an ACCA approved publisher - then you can check against the answers provided.
S
SAMI u LLAH·
cspl stand for ?
E
Edmond·
Hello sir, please I need your help.
So far,we've dealt with when the fair value of NCA is given at the subsidiary's date of acquisition .
Moreover ,when it's in excess compared to the carrying value of the NCA , we add it to the NCA in consolidated statement of financial position and we use it to calculate goodwill . So, what would be the treatment when the fair value of NCA in excess is given after the date of acquisition(post acquisition) ?
As far as the revaluation surplus or reserve is concerned ,when it's given at the date of acquisition we use it as an item of subsidiary's equity to calculate the Goodwill but in consolidated statement of financial position it's not added to the one of the parent. So what would be the treatment when it 's given the revaluation surplus after the date of acquisition (post acquisition RS) in the question ? Would it be involved in a calculation of goodwill and added to the one of the parent when doing consolidated SFP?
Thanks.
J
John MoffatTutor·
Please ask this in the Ask the Tutor Forum rather than as a comment on a lecture.
E
Edmond·
Hello sir, thank you for your lectures, they help me a lot. However, I have issue with the example 2. Why the S 's profit of the year(8000) is taken as post acquisition when you calculated the NCI ? From my point of view this profit is for one year and S's shares acquired at 1 January 2008 , therefore the year end at 31 December 2010. That means the preacquisition should be 8000(date of acquisition) and the post acquisition should be (17000-8000)=9000.
So ,NCI =9000×0,4=3600 instead of 8000×0,4= 3200.
Please I would like you clarifying this shadow zone.
J
John MoffatTutor·
When showing how this years profit is attributable, then the amount attributable to the NCI is their share (40%) of the profit they reported for this year in their SOPL, which is $8,000.
E
Edmond·
All right sir. Thanks
J
John MoffatTutor·
You are welcome :-)
A
Alex·
Hi, in chapter 24 example 1
How can we have retained earnings brought forward in the year of incorporation, I thought you can't have returned earnings if the company is not yet Incorporated.
J
John MoffatTutor·
If you check the dates in the question, you will see that the company was incorporated in 2008 and therefore presumably made profits in 2008. The statements are for the following year - the year ended 31 December 2009.
A
Alex·
Oh, I see it, thanks
G
Gareisha·
Hey, why did you use profits from operations and not profit before tax to calculate the net profit ratio?
J
John MoffatTutor·
Because that is what we always do - have you not watched the earlier lectures? The company does not control the tax rate and so taking the profit after tax is not measuring how well the company is being run.
Why didn't you take the 20% retained earnings from S for NCI?
The movement on retained earnings is only showing the retained earnings of the group and not of the NCI.
So far,we've dealt with when the fair value of NCA is given at the subsidiary's date of acquisition .
Moreover ,when it's in excess compared to the carrying value of the NCA , we add it to the NCA in consolidated statement of financial position and we use it to calculate goodwill . So, what would be the treatment when the fair value of NCA in excess is given after the date of acquisition(post acquisition) ?
As far as the revaluation surplus or reserve is concerned ,when it's given at the date of acquisition we use it as an item of subsidiary's equity to calculate the Goodwill but in consolidated statement of financial position it's not added to the one of the parent. So what would be the treatment when it 's given the revaluation surplus after the date of acquisition (post acquisition RS) in the question ? Would it be involved in a calculation of goodwill and added to the one of the parent when doing consolidated SFP?
Thanks.
So ,NCI =9000×0,4=3600 instead of 8000×0,4= 3200.
Please I would like you clarifying this shadow zone.
How can we have retained earnings brought forward in the year of incorporation, I thought you can't have returned earnings if the company is not yet Incorporated.