[knoronha]

Hi,

Thanks for the explanation. It seems the wording in the question is key to choosing the correct method.

Thanks again. Kevin

[knoronha]

Cheers but am ok with the above apart from ‘add nci share at fv at acquistion’

DEC 10 EXAMPLE

QUESTION
On 1 June 2010, Premier acquired 80% of the equity share capital of Sanford. The consideration consisted of two
elements: a share exchange of three shares in Premier for every fi ve acquired shares in Sanford and the issue of a
$100 6% loan note for every 500 shares acquired in Sanford. The share issue has not yet been recorded by Premier

ANSWER – THE NET ASSETS OF SUB BIT

Net assets (equity) of Sanford at 30 September 2010 (9,500 )
Less: post-acquisition profi ts (see above) 1,300
Less: fair value adjustment for property 1,200

*Why do they not take 80% of the 9,500….the 9500 is the net assets of the Sub as per the sub’s individual bal sheet….The parent only purchased 80% of those net assets?

ACCA past paper exam answers only seem to take the % share in the pilot paper and in one other past exam Dec 08. In the majority they take 100% in the calculation?

[Author]

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