ACCA FR Chapter 23 Consolidated statement of financial position Questions
26 Comments
S
Surabhi·
In Question 7, Where does NCI at acquisition coming from? There is no $24,000 figure in Question.
O
oltjonSupporter·
Hi again :)
I wanted to ask regarding the fair value of the consideration given when assets are transferred in order to acquire another company. If the buyer acquires another entity by transferring lets say cash and part of its PPE but its policy is to measure PPE at cost what will happen in this case, will the buyer revalue its PPE prior to acquisition and account for them accordingly (in OCI if lets suppose results in an increased fair value compared to the carrying amount)?
Thank you a lot!
A
ANTHONY·
how can access the materials i need
M
Mauro·
Hi,
I have a doubt related to Question 3 (Goodwill impairment).
Once Swords acquired 75% of Rays, the goodwill is generated.
Is the goodwill generated in the books of Swords? If so, why the 25% of the Goodwill impairment should be recognized in the NCI of Rays, If the goodwill belong to the 75% purchase and is recorded in the books of Swords?
Could you please explain this to me?
Thanks.
A
Aadithyan·
As NCI was calculated at fair value, NCI is eligible for both gain or loss in the post-acquisition. Hence, Goodwill impairment must be shared by both NCI as well as Group according to their share of %
S
salwa·
In question 1, Please explain how the NCI Share is 1,200,000
I
Issouf·
Hi,
The value of Equity share is $2,000,000 for 50 cents per share so the numbers of shares is (2,000,000/0.5)= 4,000,000 shares.
The NCI ownership being 30% hence 4,000,000 *30%= 1,200,000 shares belong to NCI.
I hope that clarifies.
S
salwa·
Please explain how the NCI Share is 1,200,000
A
andreazs·
Hi,
May I ask in Q4 why the post acq-n profit is not pro-rated? Acqn was 1.5.X3 and the year end is 31.8.X3, thus I would have thought the 50K profit is pro-rated by 4/12.
Thank you for your answer in advance
H
Hassan Bashir Ahmad·
I think its typing error.
Can you please tell me why are they deducting retained earning (for NCI calculations)? I think it should be added back
J
John·
In this question, how is it that the post acquisition profit was not prorated?
From the question exactly 1760-1940 * 9/12 should have been the post acquisition R.E..
H
Hassan Bashir Ahmad·
Question is, why are they deducting the retained earning figure of 56000 in question 2
J
jbemmy·
Please explain how the NCI Share of 1,200000 is gotten
M
momneva86·
Hi ,I also do not understand how 1,200,000 has gotten
T
taqi1·
Sir,
Could you please let me know where that 20,000(to calculate Impairment) came from in Q# 3?
T
tusharregmi·
Pleas explain how does that 20000 comes up in question number 3
S
Simone·
In question 1, can you please explain how you calculate the initial 1'200'000? (I guess it's the number of shares)
Thank you in advance
I
Innocent·
I also think it could be 4M shares @50 cents instead of 2M shares @ 50 cents, cause of 30%NCI Shares of 1,200,000
G
Gori·
Normally , the fair value of NCI is given in the question.Is there any other way in which NCI value will be asked like the one in q.1?
G
Gori·
in question 1, can you please explain the fair value adjustment calculation ?
P
P2-D2Tutor·
Hi,
The fair value at acquisition is the uplift of $2.4 million on the PPE(building). In the post acquisition period this will need to be depreciated over 8 years, so $2.4m/8years = $0.3m per annum. The acquisition date is 31 August 2014 and the reporting date 31 December 2014, so we need 4 months of depreciation as $0.1m ($0.3m x 4/12, or $0.3m/3, being the one third of the year).
Hope that clears it up.
Thanks
G
Gori·
Thank you!
O
Owean·
Hi there,
Please can you explain for Question 3 where the 20,000 that is multiplied by 25% comes from?
J
Justine·
Hi,
I believe there is a typo in the question where it says that goodwill is to be impaired by $20. What they meant is $20,000
NCI is:
NCI at acquisition
Plus:
post acquisition share of earnings
Less:
NCI share of goodwill impairment (in the questions NC% is 25% hence why 25% of $20,000 needs to be deducted from the value of NCI)
P
priyanka·
Sir will there be a share of appreciation of building to NCI... In q:1)2.4/8*4/12*30%=30 share of NCI
I wanted to ask regarding the fair value of the consideration given when assets are transferred in order to acquire another company. If the buyer acquires another entity by transferring lets say cash and part of its PPE but its policy is to measure PPE at cost what will happen in this case, will the buyer revalue its PPE prior to acquisition and account for them accordingly (in OCI if lets suppose results in an increased fair value compared to the carrying amount)?
Thank you a lot!
I have a doubt related to Question 3 (Goodwill impairment).
Once Swords acquired 75% of Rays, the goodwill is generated.
Is the goodwill generated in the books of Swords? If so, why the 25% of the Goodwill impairment should be recognized in the NCI of Rays, If the goodwill belong to the 75% purchase and is recorded in the books of Swords?
Could you please explain this to me?
Thanks.
The value of Equity share is $2,000,000 for 50 cents per share so the numbers of shares is (2,000,000/0.5)= 4,000,000 shares.
The NCI ownership being 30% hence 4,000,000 *30%= 1,200,000 shares belong to NCI.
I hope that clarifies.
May I ask in Q4 why the post acq-n profit is not pro-rated? Acqn was 1.5.X3 and the year end is 31.8.X3, thus I would have thought the 50K profit is pro-rated by 4/12.
Thank you for your answer in advance
Can you please tell me why are they deducting retained earning (for NCI calculations)? I think it should be added back
From the question exactly 1760-1940 * 9/12 should have been the post acquisition R.E..
Could you please let me know where that 20,000(to calculate Impairment) came from in Q# 3?
Thank you in advance
The fair value at acquisition is the uplift of $2.4 million on the PPE(building). In the post acquisition period this will need to be depreciated over 8 years, so $2.4m/8years = $0.3m per annum. The acquisition date is 31 August 2014 and the reporting date 31 December 2014, so we need 4 months of depreciation as $0.1m ($0.3m x 4/12, or $0.3m/3, being the one third of the year).
Hope that clears it up.
Thanks
Please can you explain for Question 3 where the 20,000 that is multiplied by 25% comes from?
I believe there is a typo in the question where it says that goodwill is to be impaired by $20. What they meant is $20,000
NCI is:
NCI at acquisition
Plus:
post acquisition share of earnings
Less:
NCI share of goodwill impairment (in the questions NC% is 25% hence why 25% of $20,000 needs to be deducted from the value of NCI)