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Translation of the subsidiary – ACCA (SBR) lectures

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  2. Hello Sir,

    You are doing a really fine job but still i would like to clarify one doubt.

    In SPL that we have translated there is a profit of $32.5m shouldn’t that amount be split into NCI and Group reserve. In SFP there is a 15m shouln’t the SPL and SPL tally with each other. If no why does this difference come.

    Hope you would provide further assistance.
    Thank you,
    Sincerely,
    Gibin.

    • The reason for working out the post-acquisition number as a balancing figure is because included in the post acq profit, there are also revaluation gains and losses over the periods. That is why the PFY does not equate the translated post acq number.

    • By using the equity table the equity table to illustrate different method ,& is allowed in the SBR exams to work in totals ( the examiner advised ) , is about application of the principles

      y/e @ Acq Post – acq
      sc (350/4.3)= 81 (350/3.8)= 92 (81 – 92)= (11)

      Re ( 280/4.3)= 65 (150/3.8)= 39 (65 -39) = 26

      post acquisition gain of $15 m- slips 80, % 20%

      i hope it helps ,

    • Hi,

      You could try and calculate it but it would be very challenging to do so as it will include all the various translation gains/losses since the date of acquisition. It is therefore much easier to keep it as a balancing figure.

      Thanks

  4. Hello,

    Thank you for the video.

    But I still don’t understand why we would use the balancing figure for post – acquisition retained earnings instead of using an average rate.

    The explanation is that ” there will be plenty of gains and losses on translatons of these net assets every single year” – but this is the profit for a specific year ( 2015) – why are we treating this as 32.5 in SPL and a balancing figure in SFP.

    This is where I get confused.
    Could you please explain?

    Many thanks in advance!

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