Basic group structures – Basic consolidation example – ACCA (SBR) lectures
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How do you determine when to use the net asset formula to calculate group retained earnings or group other components of equity?
Are the answers to the examples available anywhere else apart from the lectures?
In example 3 of BASIC GROUP STRUCTURES chapter, while calculating the group other components of equity can you please advise why are we doing the following adjustment [80% x (625 – 400)] for P’s% of S’s post-acquisition OCE.
Can we not take the $400 million directly which is the post-acquisition OCE.
The $400 million is what Han had before Luke bought it. The increase ($225 million) happened after Luke’s acquisition, so only this increase affects Luke’s group equity.
If we used $400 million directly, we would be ignoring the fact that this amount was already part of Han’s net assets when Luke bought it.
The 30% represents NCI share of post acquisition profit and the 70% represent Parent share of profit acquisition profit
So if Rey Acquired 60% and everything else stayed the same would the NCI be 40% of 1850?
My own query is how did we arrive at this 8/10 ) 8 tenth we applied on the 400, I got the 400 on the retained earning movement.
Finn was acquired on Jan 1st 2014. We are preparing the accounts for Dec 31st 2015. That is 2 years. The asset had a useful life on the 1st Jan 2014 of 10 years. Two years later (Dec 31st 2015) they have a remaining life of 8 years. Hence 8/10.
Hello sir
I learned a lot from this lecture, but I have a question when calculating the NCI and RE, with the matrix, the change of NA is calculated, but why the change can be used as the post acquisition RE and post acquisition profit?
this is the same query for me too.
We were used to calculating the movement in retained earnings and posting that as post acquisition profit.
Once reason could be that we are doing the calculation in Year 2.
But still a bit confused.
I guess it’s the same thing, if you call it post acquisition or change..it’s thesame..the change from acquisition till Consolidation
Why do you take 30% of 270 in nci to calculate sub’s post acqn and 70% of 270 in Retained earnings?