[04dbaines]

@geologist81 said:
Q1- Step-acquisition

It is first an associate recognised at cost in 2002 at 100 mil
We add back the share of post-acq profit, this was possible as the question gave the NA at acq and asked to calculate the NA in 2006 at second aqui.We also add the secon aqui at 66.

NA 2006: 100 + 27 (adj for step-aquisition) + FV of the contingent consideration + NCI at proportionate share – NA

For the NA, the question gives the CV at 348, if I remember correctly, including also the deferred tax. The only adjustment needed was for land of 10 and also current assets of 47 both not depreciable. On this 57, there is a deferred tax of 57*20% = 11.4
So I came to a NA of 348+57-11.4 = 393.6

The last part about the digital list, I did not include, there was an article about the digitale accounting in the ACCA website.
The weird part in this question was the control at 48%, but as substance has priority over form, the actual value is 60% and 40%, I also used the 40% to calculate NCI. I also got a bargain purchase.

I think the exam was average, let’s see in a few weeks

I appreciate the conceptual framework wants substance over form but the share options were not exercised. Therefore, you would use the NCI at 52%. You can still have control of an entity with less than 50% share holding but you must relate the workings to the shareholdings once control has been identified. The question advised assume control has been obtained. I believe the share options that were not yet exercised related to the part of the question where we had to discuss whether they had control of the entity. Furthermore, the internal customer list that was rightly not recognised in their own individual financial statements as it is internally generated should have been included in the goodwill working at fair value as it could have reasonably have been expected to be relevant when working out fair consideration for the entity. Intangible assets are assumed to be able to provide economic benefit when purchased as part of a business combination or in a seperate transactions and therefore would meet the criteria to be recognised in the group financial statements.

[04dbaines]

Glad you found it so easy mate, what score did you get then?

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