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Hi,
Looking at question 3 (Palistar) from the Sep/Dec 2015 exam, the examiner expects us to make an adjustment in the goodwill calculation for movement in financial asset equity investments but, as far as I can see, we don’t have enough information available to make this adjustment.
The draft statements given show one value (?), and then we are given the value at acquisition and the year end values in the notes. Are we supposed to assume the values on the financial statements are the prior year values? I would have lost the 6.5 marks available for goodwill…
Cheers,
Figures in trial balances like (and these are just examples – there are others) TNCA Accumulated depreciation, share capital and … yes, you guessed it! … financial assets that have neither been bought nor sold are the amounts brought forward from last year. For what other reason would they move? If Palister had bought any during the year, the examiner would have told you!
As for “I would have lost the 6.5 marks available for goodwill” that’s a nonsense statement! Are you telling me that 6.5 marks rest on you getting the correct figure for the fair valued financial asset?
Without even looking at the question I will put a bet on with you that there are most likely 6 different figures within the goodwill calculation (possibly 5, on or two of which are ‘tricky’)
You don’t have to get things RIGHT to pass this paper! One mistake (like wrong value of financial asset in the goodwill calculation) = 1 mark lost
And that’s it!
OK?
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