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Group SFP - Example (PUPs) - ACCA Financial Reporting (FR)

14 Comments

  1. Saebom
    Thank you for the excellent lecture, Chris.
  2. phobe
    Why is the PURP of revenue 60k instead of it being at under cost, since we are doing James consolidated SOFP, isn't this a costs under James ?
  3. Kamran
    Unrealised Profit is removed from the sellers Retained Earnings (so Molly), not the buyer
  4. fionaacca
    would the intra-group trading of 50,000 not be adjusted?

    you removed the PURP Adj:(inventory/RE-sub) of 10k

    would 50k on Consolidated SOFP, not be removed then from receivables and payables ??

    please advise.
  5. Sabi
    Intra group trading is removed from the P+L I think.
  6. fionaacca
    so as others have mentioned above..

    would the intra-group trading of 50,000 not be adjusted?

    you removed the PURP Adj:(inventory/RE-sub) of 10k

    would 50k on Consolidated SOFP, not be removed then from receivables and payables ??

    please advise.
  7. Hadiqa
    Chris, why didn't you deduct inter-company sales in current liabilities?
  8. Tshepo
    i'm so happy that i nailed this the 1st time around. thank you Chris. you are heavensent
  9. Saad
    At the time of sale of inventory of 120,000, both parent and subsidiary would have created receivable and payable at the time of sale. Why didn't we reversed that? They would have created intra company balances.

    Dr Payables (CL) 120,000
    Cr Receivables (CA) 120,000
  10. oek1
    yeah i have the same doubt
  11. Ryan
    Interco balances (r/p) are eliminated when consolidating i think right? so no point in reversing that
  12. mnsarhan94
    I would like to double check regarding the entry in the video

    DR. RE of the seller 10

    Cr Inventory 10


    as the pearnt compny doesnt fully owned the subsidary the entry must as the following


    Dr RE of the seller. 8 (10*80%)
    Dr NCI 2. (10* 20%)

    Cr Inventory 10
  13. Taiwo
    to me if you like you can do it this way, however, $10 as being removed from the total post acquisition profit before sharing like 250-10=240.


    Also he forgot to state that the $50 remaining unsold is supposed to be deducted from inventory and receivables respectively.
  14. P2-D2Tutor
    You are correct in your understanding in that the PUP is split between the group and NCI. we take account of this by including it in the net asset working where we calculate the post-acquisition profits. The PUP is included within the post-acquisition profit figure so the adjustment you propose is automatically done when we take the post-acquisition profit figure to the NCI working and group retained earnings working.

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