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Passed with 52% on 4th attempt. I still could not believe my eyes when i saw the email. I felt like i did not complete more than 50% of the paper but looks like i did. I used mainly OT and BPP exam kit. Three more to go. AAA next.
@nathan488 said:
Are you talking about where do you take the negative good will of Alston?Under IFRS 3, any negative goodwill (bargain purchase) should be credited to P/L immediately
So I showed my negative goodwill under my parents column in retained earnings and then the positive goodwill of the other parent to the face of my SOFP
I knew there was something like that to be done but i wasn’t sure so i just netted them off 🙁 anyways ill get points for the calculations at least.
@mackawara said:
I got 48m consideration and calculated 10% of net assets and goodwill at year end and got 1,9 gain to equity.I did same also…phew
@nathan488 said:
May I ask why you take the adjustment to OCE, I took mine to RE (realistically a 0.5-1 mark difference)Every question I’ve done before has taken it to RE, I know this was a disposal in exchange for shares in another company, but the NCI portion itself I took to RE
The entries for a decrease in ownership without loosing control is
DR cash (usually)
CR NCI
CR Other components of equity@mackawara said:
same here .hope got full marks on goodwillMe too
@natha488
The entries for a decrease in ownership without loosing control is
DR cash (usually)
CR NCI
CR Other components of equityDisposal 10%
I used 180 share capital and got a value of 48
Calculated increase to nci and difference recorded to oceImpairment 14
Goodwill sub 1 -20 something and sub 2 70 something
Got a negative post profit -6 for sub 1 and sub 2 was 42 i think but these included increase in other components of equity which i seperated after
Deducted 5 for contingent liability
Fv plant was 80 and land 30
Failed 36% first attempt…Was expected since i completed around the same % of the paper…Got to work on my time management.
Fail, 1st attempt…41%..Mainly due to not studying enough. But i am happy to see this mark as I only completed 57% of the question paper. So if i did the whole paper i would have passed. Il be sitting P2 in March while im fresh…
The npv mcq of 200.asking for sensitivity. You calculate the contribution (4000-2000)=2000. so answer 200/2000*100=10%
Note that the values was already given in PRESENT VALUES. No need for discount rates.
Ok i am rily relieved that i got about the same answers as most of you have stated.
So…
Q1) Overtrading
Calculated the ratios for the two years given for comparison in the industry average and calculated % increase in the values given in the FS. It was obvious the company was overtrading due to rapid increase in sales,payables,receivables and overdraft.Liquidiy ratios had deteriorate…etc…Q2) MV
DVM i got 5.something dollars per share. I could not calculate the total MV as there was no nominal value for the shares to calculate the number of shares in issue.
Net assets forgot
P/E method – used the last total earnings and multiplied by the P/E ratio givenQ3) Hedging net payment of 600,000 Euro by forward or money.Forward better as you get to pay 6,000 dollars less.So it woud cost you less by using forward hedge
Q4) WACC (Rily confused me at one point in time)
I got 9.8% for both due to rounding offs which i should not have done as i would have gotten a small difference of about 0.something,but i guess il get points for my calculations.
the 8% loan notes. I took MV as the $16K and cost of debt 8%. As there were no additional info on MV and cost and the time the loan will be redeemed.So i guess it was that or nothing.
Q5) NPV.
Negative for the four yr period. I calculated using the perpetuity method as it said for the forseeable future but now thinking about it it should have been for 6 yrs as the asset life was only 10 yrs got a possitive high NPV.Note that the TAD had to be discounted the normal way as it was only for 10yrs. TAD-$112,000.And for the probabilities just had to find the contibution for the 3 types and multiply by the probability rate and get $18,450 which is then multiplied with the units sold.So yeah…guess i did alright.Hope its a pass.fingers crossed.
But it was not such a bad paper.The mcqs was doable for me
Hi Sir,
Thank you.I understand now.Ive been doing it the wrong way. You are always good help.
Hi Sir,
Sorry i forgot to add to the above.
Also in the same question they asked to calculate the book value WACC. My confusion is why did they include Reserves in the total book value of equity (Ve) used in the WACC formula?
As the question also asked to calculate marekt value WACC and we only used Ordinary shares in the calculation of the market value of quity!Can you explain why?
Thank you.Hi sir,
For the above you stated that if our calcultaed IRR is different by more than 1% from the examiners’ then it means we made an error somewhere.
I did a question in my kaplan exam kit (Q.42,Tinep Co, Dec’14)
The answer – 4%&5% – IRR=4.7%
I used 10%&15% – IRR=2.7%I did the arithmetic calculation over and over again and still got the same answer. Could the difference be acceptable or there is something i am rily missing?
Please help.
Thank you
Hi John,
I still cannot seem to understand the similiarity of the logic behind these two formulas to get the operational gearing.
1) Fixed costs/Total and 2) Contribution/PBIT
The formula should be giving you the extent to which the operating costs of a company are fixed rather than variable.
I undersand this from formula (1) but not from formula (2).
Am i suppose to assume that contribution is a fixed cost?(Which does not make scence to me as it not a cost in the 1st place).And PBIT is representing what exactly?Please help.
