Group SFP - Example (Basic consolidation) - ACCA Financial Reporting (FR)
26 Comments
P
phobe·
I do not get part b, why are they only deducting the retained earning in the working, what about the share capital, why was it not added?
E
Evelyne·
It is because the share capital remains unchanged since the acquisition
A
akshaya·
yeah and therefore there was no change in the shares owned by anyone. For NCI - the sh capital is already included in the NCI @ Acq date
M
Mohammad·
Hello sir. I have a question for you. In the NCI lecture you told that the formula to measure NCI for fair value method was NCI% x S Shares in issue x S share value. But u used a different formula to solve this question when calculating NCI. Please elaborate. Thanks
S
Shadreck·
Why weren't the net assets used to calculate the NCI in b?
R
Radoslav·
I guess it is because it was used FV method. If we include nets assets (equity shared capital + retained earnings) it would be proportionate share of net assets method.
S
Syed·
Can someone explain to me why we don't include share capital in the calculation? I try to relate with example 3 where we need to add net asset figure (share capital + retained earnings). Is it because the share capital balance remained unchanged since the acquisition?
S
Syed·
This is relating to NCI @ 31Dec 2019
L
Lugendran·
the Total Assets are : 6900
Total E + L = 6755 ( 2000 + 2175 + 2580)
It did not balance sir. Please to clarify me on this sir. Thank you
M
Matthew·
Hi,
You are not including the NCI in the equity section. Total assets should be 7,250 and total equity/liab. will equal this if NCI is added.
L
Lugendran·
Yes its the same with what got.I'm confused. pleplease to clarify this sir. thank you.
L
lydiaxuxin·
Hi why the full goodwill cannot be calculated as:
1380/75%-(1000+480)=360
as 1380/75%=1840 stands for the total FV of the Erica as of Jan-20X3, and (1000+480) is the total book value of net assets of Erica as of Jan-20X3, so the difference should be the total good will
I guess it is because i did not use the NCI=450 as of Jan-20X3, but I still get confused why there is the difference?
Thank you!
M
marina·
Hello,
I am confused why the S's post-acq. profit is not from W2) Net Assets @post-acq.?
Instead you take S's RE differences (see below)
w4) NCI = NCI @acq. 450000 + 25%* (660000-480000)= 495000
If you prepare w2) then the S's post-acq. profit will be : 4040-1480=2560
In the example 7, you use the S's post-acq. profit from W2) Net Assets @post-acq., but why not to do the same in this example?
M
marina·
please ignore this message, i made a mistake in calculating w2)
All is correct :)
H
Halsey Irwin·
How is it that we used the Fv method when it didnt say it in the question? I thought we were to assume that we are going to use proportional method unless stated otherwise?
P
P2-D2Tutor·
Hi,
We are given the NCI at fair value in the question, so we should therefore use it to calculate the NCI and goodwill.
If we weren't given the fair value of the NCI then we would have to use the proportionate share of net assets method.
Thanks
A
aarina·
sir the total asset and total E&L are not balanced after consol
why is that so?
TA: 6900
TE&L: (2000 + 2175 + 2580) = 6755
T
Tehreem·
no your doing the addition wrong. here is the actual adittion in SFP
for ASSETS part we also incorporate Goodwill
hence:
6900+350=7250
for LIABILITIES we have to add NCI in equity hence:
2580+2175+2000+495=7250
HOPE U GET IT :)
N
nazrin8434·
Hi sir,
is the total of liability is 1840+740= 2580?
Kindly correct me if aim wrong
thank you
A
anishgunness·
Thanks
P
P2-D2Tutor·
Hi,
Good work tehreemkhan123! Yes, the consolidation balances provided that you include the goodwill in the asset total and the NCI in equity.
nazrin8434, yes the liabilities are 2,580.
Thanks
A
anishgunness·
thanks nazrin
J
Jess·
Hi please how did you arrive at the 2,175 figure in the total liabilities computation?
L
Linh·
Hi, 2175 is group RE which was calculated in the lecture.
C
Chladny·
Thank you !
L
Lugendran·
Yes its the same with what got.I'm confused. pleplease to clarify this sir. thank you.
Total E + L = 6755 ( 2000 + 2175 + 2580)
It did not balance sir. Please to clarify me on this sir. Thank you
You are not including the NCI in the equity section. Total assets should be 7,250 and total equity/liab. will equal this if NCI is added.
1380/75%-(1000+480)=360
as 1380/75%=1840 stands for the total FV of the Erica as of Jan-20X3, and (1000+480) is the total book value of net assets of Erica as of Jan-20X3, so the difference should be the total good will
I guess it is because i did not use the NCI=450 as of Jan-20X3, but I still get confused why there is the difference?
Thank you!
I am confused why the S's post-acq. profit is not from W2) Net Assets @post-acq.?
Instead you take S's RE differences (see below)
w4) NCI = NCI @acq. 450000 + 25%* (660000-480000)= 495000
If you prepare w2) then the S's post-acq. profit will be : 4040-1480=2560
In the example 7, you use the S's post-acq. profit from W2) Net Assets @post-acq., but why not to do the same in this example?
All is correct :)
We are given the NCI at fair value in the question, so we should therefore use it to calculate the NCI and goodwill.
If we weren't given the fair value of the NCI then we would have to use the proportionate share of net assets method.
Thanks
why is that so?
TA: 6900
TE&L: (2000 + 2175 + 2580) = 6755
for ASSETS part we also incorporate Goodwill
hence:
6900+350=7250
for LIABILITIES we have to add NCI in equity hence:
2580+2175+2000+495=7250
HOPE U GET IT :)
is the total of liability is 1840+740= 2580?
Kindly correct me if aim wrong
thank you
Good work tehreemkhan123! Yes, the consolidation balances provided that you include the goodwill in the asset total and the NCI in equity.
nazrin8434, yes the liabilities are 2,580.
Thanks