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if you will successfully grasp essence of p5 and apply that in your real life before exam sooner the better eg: critical analysis,implications in future of anything , you will perform better in exam too.
Go Solve Problems in exam !!!
1-
Choice of Settlement with ISSUER/Purchasing entity:F.L/F.A unless all other alternative options results in it being Equity
So choice of settlement does’not require entity to split into equity and debt.
2-Convertible Debt :
as An Asset-Should be Booked an Asset at Fair Value P/L (as amortized cost tests it doesn’t passes) ?1- For Disposal of Ceram, Examiner provided “NCI of Ceram attributable to
Bochem” (not Ashanti) .and Also included this in gain/loss calculation^ , is this the reason that portion of gain/loss is attributable to NCI of bochem?
2-How is the 30% calculated ? [Bochem had 80% holding,disposed of 50% ,that lefts with 40% holding on associate for Bochem ]
3-Increase in NCI :
Amount recognised as non-controlling interest (Net assets per question at year
end $210m + Fair value of PPE at acquisition $10m – depreciation of fair value
adjustment $4m + goodwill (44 – 8·8)) x 10%Does that mean NCI-adjustment for Ceram ,should not be apportioned?
The reporting entity also attributes total comprehensive income to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. [IFRS 10:B94]
Feedback:
Thread was over,However i felt like providing you feedback.hope its fine with you.incase any other student asks you.Well , according to my subsequent research , i have come to the conclusion that they can be negative .
Gratitude:
(taking a chance (Otherwise you would have not liked the idea 🙂 )) of saying Thanks for great support (Unable to express my gratitude in words ) .Thanks v v much.Alright 🙂 but i need to go with atleast a final conclusion before sitting at exams.
And i.e : Unpaid contributions is part of Asset plus a liability [but separately accounted right ] Otherwise that would have set off the effect Net Defined Liability.
this conclusion is reasonable with goodluck 🙂 ?
Ashanti June 2010
1.Ashanti Acquired Bochem ,Bochem Acquired Ceram. ( Bochem’s NCI will be adjusted for Consideration paid for Ceram)
Ashanti Disposes 10% equity interest in Bochem to NCI .
How would Increase in NCI would be accounted for.
(Should the BochemNCI at transaction date would be completely proportioned?without taking account of NCI Adjustment —- as normally i take carrying amount of NCI at transaction date and proportionate it according to the change in NCI)^
But its defined contribution Plan,isnt it.
And we are concerned with defined benefit plan’s contributions.Also can you look into the question
Traveller 12/11,that’s a plus.Looking forward
(to be honest, i made this example up so , i could understand that thread too.apologize for being difficult student 🙁 .I assume answer of this will help me get it all)
So i am looking forward for complete adjustment entries for consolidation for p/l and sofp.
[you may add “cost of an associate” or “profit of year of associate ” any values]Difference is NCI Premium ( F.V of NCI – Share of Net Assets attributable to NCI ].
But if it confuses you, you should ignore (to learn the concept )I just constructed the example for better understanding.You may put missing values if required.(Say 25%)
1-Question was Traveller 12/11-UNPAID Contribution -Employee benefits.
I see it as unpaid contribution because it was paid after year end.(Would you please specifically look into the matter , and see if i am missing something ?).
(Yes googled, no success)
2-
(Did i get it right?)
If a contribution is paid by Employee (Whether it is discretionary or compulsory) , surely that not only increases the liability ( Do you mean contribution by employees increases obligation)
So its a [ Dr Plan Asset Cr Liability ]Same questions.
Concerned about the Decrease in NCI calculation.Here it is calculated as Change % * [Net Assets at disposal + Impaired goodwill (although kit answers say its unimpaired goodwill,is there a reason for this?) ]
Aren’t we mistaken here, as When sales is from associate to parent, i guess parent inventory is overstated now. Hence Crediting Group inventories.
Otherwise, all good.
ThanksExample 1:At acquisition :
difference b-w fair value and book values of Associate is a depreciating asset With remaing useful life.
[ as the Asset and Liabilities include book values]{should we debit Consolidated Reserves and credit Invesment in associate ; as reserves will change by additional depreciation on revalued amount }
Example 2: AFTER ACQUISITION
a depreciating asset With remaing useful life is revalued upwards and this revaluation is not incorporated in associate accounts.{
i)should we debit Investment in associate and credit Consolidated reserve ; as reserves should increase and hence investment in associate .
ii) depreciation that should be charged and have impact on associate resrves. debit Consolidated Reserves and credit Invesment in associate ; as reserves will change by additional depreciation on revalued amount .}{potential solutions }-only group’s share amount is taken ]
when you say take share of adjusted retained reserves (does the above potential solutions achieves same )?
dividends by subsidiary or associate ignored in C-p/l.
intra group balances of div recievable/ payable ( related to subsidiary) will be cancelled in C-sofp.
dividend recievable from associate will be shown as asset .[ignore meant there is nothing to cancel with so keep them where they are Here as an asset]
Query :
did i get it right? [ i apologize for communication issues .(understanding your explanation regarding presentation of group,s share of pup).
assume amounts are correctly calculated.
as you said :
“Once
we have that
figure, debit
consolidated
reserves (debit
cost of sales) and
credit Investment
in Associate ”as the sales is from associate to parent. right presentation would be not to debit cost of sales . shouldnt we increase any other expense ! say admin or distribution . ( as sales is from associate)
do you mean that in Csofp intra group balances with associate ignored ? ( including dividends recievable )
although the thread was over .
i wanted to re check with you.1-dividends recievable from associate .How it can be eliminated / cancelled in sofp? ( as it,s nature is also intra group balances with associate )
2- arent intra group balances with associates ignored ?
i) & ii) You made it clear that no impact on sales or cost of sales in either case.
Question:
iii) Only unrealized profit will be adjusted for Consolidated P/L
if its Parent to Associate .
DR Cost of sales[p/l] / Consolidated reserves [sofp]
CR Investment in Associateif its Associate to parent
Dr Expenses ( reducing associate’s profit )[p/l] / Consolidated reserves [sofp]
Cr Inventoryis it correct adjustment?
Summarizing the thread:
1-Ignore dividends . Only just make sure Consolidated p/l should not include the investment income?
2-Intra group dividends payable/recievable will be cancelled.
It seems like we can leave the thread with this.
(Thank you )There is NO SUCH THING as some Exemption or Addition in recognition criteria (provided by ias 37) of restructuring provision for consolidation ?
if this is right. We can leave the thread with this.
Concluded from your reply :
For P2 purposes
Before year end:
Proposed and Declared dividend will be recognized : give rise to liability.Question:
After year-end :
1-Proposed /declared dividend [ Not an adjusting event and disclosed ? ]
2-Bonus issue [ (read somewhere while doing a kit question) , its a major share transaction that should be disclosed but it is an exception so it will not be disclosed ] .