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Chapter 7 example 8

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Chapter 7 example 8

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 3, 2016 at 1:57 am #330979
    wwwilliams
    Participant
    • Topics: 8
    • Replies: 6
    • ☆

    In the Goodwill calculation why wasnt share premium of (80000 x 0.65) included when arriving at FV of SNA @DOA.

    I am very uncertain as to why this is the case and would please like some clarity.

    August 3, 2016 at 6:45 am #330994
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23309
    • ☆☆☆☆☆

    The Guido shares were issued, according to the question on page 38, at par with no share premium on that issue

    The market value of $1.65 at date of acquisition is a market value – it’s nothing to do with Guido and Guido has absolutely NO control over that market value

    If I sell my shares in Guido to you immediately before the Ivona takeover and you pay me $1.65 …. how does Guido reflect that transaction?

    It doesn’t! That’s a private deal between you and me

    OK?

    August 10, 2016 at 3:07 am #332295
    wwwilliams
    Participant
    • Topics: 8
    • Replies: 6
    • ☆

    thank you so much that clears up everything

    August 10, 2016 at 6:21 am #332308
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23309
    • ☆☆☆☆☆

    You’re welcome

  • Author
    Posts
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