[El]

I think the debt value should be deducted as the whole growth figures were based on geared capital structure, including the 10% WACC which is presumably less than the current all-equity cost of capital
Overall, ACCA is a joke. This is my second attempt -failed in June- and this exam is at least 10 times easier which makes me think they want to apologise for June paper which was hopelessly unworkable

[El]

I practised a lot but it doesn’t matter since I couldn’t show that on the exam
I think its more about grinding out marks than intensive preparation as the calculations involved are overwhelming really

[El]

pent too much time in NPV, I got negative marginal with 12% positive with 9%, wasted too much time on NPV, I guess where I failed the paper

[El]

Mike,
Absolutely spot on, no need to check it again.
Thanks a bunch!

[El]

Thanks very much, that what I thought too although it’s very confusing as to how they posted the cash transaction without adjusting the investment in Stem accounts!

[El]

ginadaqing, what question you mean?

[El]

This is one super complicated question, but I did some research and here’s what I found.

It depends on the timing of the loan and whether it is downstream or upstream.
If it’s been on the parent’s books for more than a year before parent gainig control, the gain or loss is posted to P/L this is because similar gain or loss must’ve been posted to P/L on previous periods (this is for upstream trans ie parents’ loan to sub).
So, in consolidation, using the historical rate will automatically adjust the gain or loss to the balancing figure of the exchange reserve, then the double entry will be on the historic rate
: DB Non Current Liability
CR Financial Asset
If the loan is on the same period of acquisition, it is then a monetary item and on practice it is adjusted on the transferred consideration and is cleared on the acquisition date.
Hope this is helpful!

[El]

Based on the answer to q1 June 2011, the exchange rates to be used are:
Share Capital Historic
Pre-acq RE Historic
Post-acq RE Average
Revaluation Surplus and Other Component of Equity should be treated accordingly depending on whether they were acquired pre-acquisition or post acquisition.
I hope this is relevant!

I have a question on the same exam same question
WHARE IS THE ADJUSTMENT TO THE $19m TO THE CURRENT ASSETS (OR CASH)??????
I wasted mighty 2HOURS trying to find it
Please HELP HELP HELP !!!

[Author]

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