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Hello Sir, for this technical article on the acca website, I have some question about it.
“https://www.accaglobal.com/gb/en/student/exam-support-resources/professional-exams-study-resources/strategic-business-reporting/technical-articles/business-combinations.html”1.”There is no exemption from the 12-month rule for deferred tax assets or changes in the amount of contingent consideration. The revised standard will only allow adjustments against goodwill within this one-year period.”
@Is it means any change of deferred tax and contingent consideration after the acquisition date will affect the original goodwill calculation on acquisition date?
2.”Where NCI is measured at fair value, the valuation methods used for determining that value require to be disclosed; and, in a step acquisition, disclosure is required of the fair value of any previously held equity interest in the acquiree…”
@In step acquisition, the FV of NCI of any previously held equity interest in the acquiree ,is FV on the previously held date or remeasurement date?
3.In the calculation of example 6, Why the examiner include all of “Gain reported in comprehensive income” rather than in proportion as NCI have recognised the comprehensive income into the year-end balance [(6+(10%x(83-74)))]=6.9?
If including all in the working, will it be double counting?Thank you.
1. Yes – goodwill will change
2. Remeasurement date
3. You would report the gross amount in OCI and then show NCI separately in the “attributable” disclosure3.No I mean refers to this part: “Reclassify to profit or loss any amounts (the entire amount, not a proportion) relating to the subsidiary’s assets and liabilities previously recognised in other comprehensive income, as if the assets and liabilities had been disposed of directly”
Why is it entire amount not in proportion? What is the logic/reason behind it?
Thank you.
My logic is that we always consolidate 100% of sub’s results and show NCI separately
Thank you Sir,
Why the answer for example 6 is the loss on disposal rather than gain on disposal? is it a mistake?as examiner stated at above ” The gain recognised in profit or loss would be as follows:”
but the answer states that is a loss on disposal.
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