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Group SFP Example 5 – ACCA (SBR) lectures

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  1. Great lectures overall really. Kudos !
    BUT this is just SOOOOOOO frustrating, not even mention why we use different method for disposal. If we have the value of 10% of NCI (14 – the given 13 plus their share of post acq) and we want to know the value of 20 % shouldn’t we just double it to 28. You are getting close to 28, but is that a fluke? Urgh.

    Again, great lectures

    PS the way I try to work that part out is simple proportions

  3. I have the same question as below

    “Why do we calculated the NCI differently?
    Ie if we are looking to purchase more of Hulme we take 10/40 *NCI but when we decrease ownership like with jones we take 20% of the NA+gw”

  6. I have the same question as rachelmin:

    “Why do we calculated the additional or decrease in NCI differently?
    Ie if we are looking to purchase more of Hulme we take 10/40 *NCI but when we decrease ownership like with jones we take 20% of the NA+gw”

  7. Why do we calculated the additional or decrease in NCI differently? Ie if we are looking to purchase more of Hulme we take 10/40 *NCI but when we decrease ownership like with jones we take 20% of the NA+gw

    • they are in fact consistent. the key bit here is the base factor these numbers are on.

      NCI is base on its 40% ownership. so dividing NCI by 40% is the whole ownership.
      Whole ownership is (NA+gw)by definition.

      so NCI/40%=(NA+gw)

      so 10/40 *NCI = 10% / 40% *NCI = 10% *(NCI/40%) = 10% (NA+gw)
      same layout as the Jones’ formula.

      • Actually, that’s still inconsistent. For Hulme’s case, you’re assuming NCI/40% is (NA + GW). But for Jone’s case, if you take NCI/10% you won’t get (NA + GW). The NCI in respect of Jones is 14, which represents 10% of the sub’s worth. And as we see from the example, the (NA + GW) in respect of Jones is 143. Now NCI/10% = 14/10% = 140. Obviously that doesn’t result in 143. So how is that consistent?

        My take is that the basis depends on where you’re transferring the worth from and to. If you’re transferring from the NCI, the basis will be on the NCI; if you’re transferring to the NCI (from the net assets), the basis will be on the sub’s carrying amount (i.e. its total worth, being FV of net assets + GW). As for the reason, Chris has said in the last video that in the second case, we’re not transferring more of the already owned NCI to the current NCI, but the assets, liabilities and goodwill, therefore we’re basing the % not on the NCI, but the assets, liabilities and goodwill (by assuming that the sum represents 100%). However, mathematically the percentages don’t line up perfectly, which is what I can’t explain. I wonder if that’s explanable.

  9. Hi
    on SBR example 5 on Change in Group Structure
    This is my workings
    Working No 5: Group Retained Earnings
    100 % P 110
    + w2 70% x 40 28
    +w2 70% x 10 7

    and then have
    Working No ^: Other Component of Equity
    100% P 10
    -w4 -1
    +w4 6.4

    why are we using the old percentages on GRE and adding the figures that affect OCE on GRE

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