[ACCAstudent]

but i still haven’t understood the first question i posted. could you please clarify.

– P acquired S on 1st April 2008
– Consolidated RE to be calculated for the year ended 30 September 2008.
– At acquisition date fair value of a depreciable non-current asset was 2m in excess of its carrying amount. remaining life at date of acquisition is 5 years (straight-line method).

My question is:
When calculating the consolidated retained earnings i get 18,000 for fair value adjustment of this asset. ((2m minus (2m/5 multiplied by 0.5)). However in the answer the fair value adjustment shows only 200, which is the depreciated amount before acquisition.
In ur notes chapter7: Q11 you took the fair value remaining after depreciation, but in this answer they have used the depreciation amount itself. Please explain

[ACCAstudent]

i am so sorry sir.. i had doubt about the Highveldt questions too. but i posted to clarify the question ‘Pedantic’. That’s why got confused. The details i have posted is from the ‘Pedantic’ question. sorry for the wasted time again 🙂

[ACCAstudent]

i do not know which year it is.
Highveldt is the question name

im doing from this version
FOR EXAMS IN SEPTEMBER 2016, DECEMBER 2016, MARCH 2017 AND JUNE 2017 book

can you also explain the fair value adjustments made in consolidated retained earnings workings.

[ACCAstudent]

No there won’t be any difference. I was taking the same pre acq retained earnings for both method which i understand now. Thank you for the time sir. 🙂

[ACCAstudent]

But will it not give a different figure for consolidated retained earnings and goodwill if I use the other method?

[ACCAstudent]

sorry.. it was 70% of 200,000 shares of Wizard.

I understood how you calculated, but my question is why is it only the depreciation amount ($6,250). In example 11 of chapter 7 (Fair value measurement) in your notes you have taken revaluation amount less depreciation of the revaluation amount, not just the depreciation of the revaluation amount.

[ACCAstudent]

I do the calculation as the lecture format. in this question’s answer, share of subsidiary post acq retained (revaluation part) is not calculated as (850,000-600,000)-((850,000-600,000)/40)=243,750. Why?

This is question no. 92 (page 28) of BPP revision kit.

[ACCAstudent]

It’s very clear from course notes, thank you!

[ACCAstudent]

sorry i didn’t know where to post the question, next time i will post it in ask the tutor forum.

yes i have watched the lectures, it is very helpful.

for example in a question, selling price, variable cost and fixed cost that can be avoided by buying from outside is given. There is limited resource and they want to produce 2 different products. how would they decide which product they should be manufacturing and which to be purchased.

do i have to calculate contribution from each product per unit of limiting factor and choose to manufacture the product which gives the highest contribution and buy the other
or
would i need to use relevant costs to calculate how much is saved from each product if bought from outside and make the buying decision based on this

[ACCAstudent]

please ignore this question. thankyou

[ACCAstudent]

now i understand, i have been thinking sales volume variance and sales quantity variance is the same. i will go through the notes and read about it. thank you very much sir 🙂

[ACCAstudent]

contribution is 40 percent of the standard sales price

[ACCAstudent]

budgeted budgeted actual
sales price sales
x 5,000 20 5,800
y 3,000 35 2,700
z 2,000 40 1,800

i am getting different variances when i do separately i get 1,000 adverse, that is:

x 6,400 favourbale
y 4,200 adverse
z 3,200 adverse

but the other method gives me 8,750 adverse

could you explain where i am going wrong

[ACCAstudent]

thankyou..

[ACCAstudent]

Thankyou 🙂

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