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SBR

Changes in group structure – step acquisitions - ACCA (SBR) lectures

VIVA Subject Guide
YouTube video

16 Comments

  1. An
    Hi Mr Steve,
    Thank you so much for the lectures!
    I really enjoy your teaching style – you always explain things in such an easy-to-understand way and the way you connect the terminology to real-life examples makes it so much clearer. Your sense of humor also makes the class fun and engaging, which helps me stay focused. I really appreciate the effort you put into your lectures. Wishing you all the best and may you always be blessed!
  2. Spongebob
    Template on video 10:50 is misleading. If you take notes for yourself, please be mindful:

    cost of new investment 35% 45 value @step date
    FV of existing stake 40% 52 value @step date
    NCI 32 value @step date
    Net Assets of S (105) value @step date
    resulting G/W 24

    CV (value @ acquisition) of old stake is only used calculating difference sent to PL and not in the above
  3. Katlego
    Just to correct a mistake. At 10'37", it is in fact the FV that is put in the goodwill calculation, not the CA. The tutor made an error there.
  4. Sameer
    Well found! Thanks!
  5. Tuan Anh
    Good morning Sir,

    In example 2, what should we calculate if A only purchase additional 15% of B with amount of for example 60?
  6. Raymond
    Hi,

    For the (W) Goodwill explanation, shouldn't it be "NCI at date of additional investment" instead?

    Thanks.
  7. dazzah666
    In Ex1 - in reality would the investment not have been revalued annually in the years preceding gaining control? So some of the 12m profit would have been realised in prior years and the book value therefore may not be the 40m initial investment?
  8. wgk
    Then I suspect that the value of the original investment would be in the books at $52m and therefore nothing would need to be processed through profit or loss!!! Just an idea!!!
  9. wgk
    Also take note of the comments in the video (Changes in group structure – step acquisition) between 16:13-16:30 ref. the difference between carrying amount and fair value. That's why it may be better to view this as "revaluation" rather than "disposal" - see video between 09:11-09:21 where he makes reference about some people prefer to view it as a revaluation rather than a disposal!!!
  10. wgk
    10:33 - 10:40 on video

    Should the arrow start at the FV and not the CA!?
  11. andrerahming
    Just came to ask this same question. But yes I think so.
  12. wgk
    Agree @andrerahming
  13. Jonathan
    HI, thank you for the videos.
    I have a simple question, but always gets me confused, especially if it comes to the exam.

    What should we consider if the % of shares that we have is exactly 50% ; Is it treating as an associate because we dont have majority, or still it goes as subsidiary as we have equal control (unless this is treated as significant influence).

    And same thing when we have 20% exactly. Associate or simply investment.

    Thank you
  14. Faeq Quadri
    Don't know how relevant this response will be since I am 6 months late, but if we have EXACTLY 50%, we consider it to be a subsidiary, and if it is 20%- 49%, we consider it to be an associate.
  15. wgk
    Also I suggest a re-read chapter 3 of opentuition notes - especially section 1 and section 2, And listen to the accompanying video. Basically it is all about "power to direct" or "significant influence" - and that does not necessarily mean attaining 50% or > 50% as in the case of a subsidiary OR attaining between 20-49% as in the case of an associate. Example 1 (pp 12 of opentuition notes) is very simple but clearly demonstrates the issue of "significant influence".
  16. wgk
    Also take note of the comments in the video (Changes in group structure - step acquisition) between 12:40-13:13 ref. associate vs normal investment!!

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