[Nischaye]

Hi,

Thanks a lot.

Now i feel a little relieved.

Continue the great work with the videos, they are very easy to understand and you have a unique way of not making the subject boring.

Thanks again.

[Nischaye]

Hi,

I think that i understood it.

The workings that you did is correct.

In the example of Share exchange, you have calculated the value of P’s shares, which is $6M. The reason why you debited the investment by that amount is because that’s the consideration amount.

The question did not include the consideration amount, it only specified the type of consideration made, and if that question would have included the consideration amount, it would be something like that, “P acquires 80% of 10M Ord $1 shares at a consideration of $6M where payment is made by offering a share exchange…”

The question is only mentioning the different types of consideration that P is giving to the Subsidiary. P did acquire 80% of the 10M Ord $1 shares BUT at any moment did they mention the consideration amount. This is the purpose of the question,for us to calculate the consideration.

I sincerely hope that i got this right. Else i might confuse this during the exams.

Please confirm my understanding.

[Nischaye]

Understood.

Thanks.

[Nischaye]

Understood.

Thanks.

[Nischaye]

I actually made a mistake while writing the question.

I meant (1+g)^3. I did understand the concept that at market value in 2 years time will give a numerator of Do (1+g)^3 in the formula. I guess i was in a hurry while writing the question.

I was too quick to question you. I only had to try the formula to find out that indeed i would get the same answer.

I feel more at ease while using the formula, i guess i will stick with it.

Thanks a lot for your time and help 🙂

Carpe Diem

[Nischaye]

When i asked “is it still the case”, i meant, is it still the case that there is little to no chance of getting direct method. I did actually understood the sentence about Sepp Blatter.

I should have formulated my sentence more properly, my bad XD

Thanks Mr Mike for your reponse and thanks again for replying to my thread on profit on disposal for cash flow, you made it very clear.

[Nischaye]

Thank You for your quick reply 🙂

[Author]

Posts