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November 3, 2019 at 12:25 pm
Hi Chris, Thank you for the great lecture. But why do we use two different methods to calculate the change in ownership for Jone and Hulme?
September 24, 2019 at 3:52 am
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”
August 9, 2020 at 5:36 pm
May 30, 2019 at 2:41 pm
Thanks for the great lectures, in the answers at the back it says Group Retained Earnings is £135.6, it should be £148.4.
May 30, 2019 at 9:14 pm
Thanks for pointing it out. I’ll try to make sure I get the next set of notes updated.
May 12, 2019 at 11:36 am
thanks for the great lecture aren’t we missing 100% of parent OCE in the final part of the calculation? (+10 to the total)
October 12, 2018 at 12:50 pm
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”
February 15, 2019 at 4:56 pm
simply because when you sell you need to work out what you selling i.e. percentage of NA + GW and when you buy you need work out the percentage of NCI.
September 24, 2019 at 3:16 am
is it correct?
August 3, 2018 at 10:38 pm
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
November 20, 2018 at 2:26 am
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 10/40 *NCI = 10% / 40% *NCI = 10% *(NCI/40%) = 10% (NA+gw) same layout as the Jones’ formula.
February 27, 2019 at 3:41 pm
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.
July 18, 2018 at 9:57 pm
why is the retained earnings for the subs calculated using net assets rather than retained earnings on the BS ?
June 18, 2018 at 1:02 am
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
September 1, 2018 at 6:52 pm
Yep, thought the same. I think he just clubbed all the ‘Reserves’ in one so it’s really the Group RE+OCE working.
October 6, 2018 at 10:17 am
Retained earnings=Retained Earning+OCE in the exam?
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