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Confused with the Workings method

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Confused with the Workings method

  • This topic has 2 replies, 3 voices, and was last updated 15 years ago by Anonymous.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • May 23, 2010 at 5:58 pm #44077
    alimohamed
    Participant
    • Topics: 3
    • Replies: 1
    • ☆

    Hi everyone,

    I have learnt from the Kaplan Book the way to do the working when in comes to carrying out the consolidation i.e 1. group structure 2. net asset of s 3. goodwill 3. minority interest .etc. and now having watched some of the video in this site the tutor actually teaches to do this in a different way i.e 1. group structure 2. goodwill 3. group profit and so on.

    My question is is there a particular way of doing the working and numbering it or it is up to us.

    Thank in advance

    May 23, 2010 at 7:11 pm #60898
    Irfan
    Member
    • Topics: 1
    • Replies: 21
    • ☆

    i think, there is no particular way defined to show ur working in either of sequence u mentioned.
    u can show ur working, the way u find the most easy, it is up to u, all u have to care is just put working number reference correctly.
    i also personally believe that working of group structure should be given working number 1 (logically better) and the rest is up to u,

    May 24, 2010 at 3:29 am #60899
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 27
    • ☆

    To prepare consolidated statement, I am sticking this templet:

    (W1) Group structure
    (W2) FV Purchase consideration if question is complicated (for example: Consideration include: cash consideration, deferred consideration, share exchange, loan notee can….), I often separate it.
    (W3) FV adjustment of asset of sub @ acquisition
    FV adj = FV – CV
    -Additional depreciation


    Net FV adj
    (W4,5,6…) All adjustments based on notes in questions (investments, loan note, intra-trading company, intra-transfer of fix assets…)
    W4,5,6… should show all adjustments (if any)
    (W7) Group g/w @ acquisition date
    Group g/w = G/w of Parent + G/w of NCI
    G/w = FV consideration(W2) – Groupshare of FV (*) of Net asset (**) of Sub@ acquistion
    –> Net g/w = G/w – Impairment (if any)
    Then, need to allocate Impairment g/w to Parent & NCI per proportion –> Remaining g/w of Parent + Remaining g/w of NCI
    (*) FV = FV adj (W3)+ CV
    (**) Net asset = Equity

    (W8) NCI @ B/S date
    + Groupshare of net FV (***) of net asset of subsidiary @ B/S
    (***) Net FV = Net FV adj (W3)+ CV
    + Remaining g/w of NCI (W7)
    – Groupshare of URP(if Sub sells goods to Parent)]
    (W9) Group Reserve @ B/S date
    + Reserve of Parent – Impairment g/w to Parent (W7) – URP (if Parents sells goods to Sub)
    + Group share of [post acquisition Reserve of Sub – Additional depreciation (W3)-URP(if Sub sells goods to Parent)]

    In my experience, Group structure is the first step.
    NCI & Group Reserve should be put at the end after you made all adjustments. Please read each notes carefully and find out their impacts
    .
    I find exercices of consolidation very easy to make us confused and disorder if we can’t outline every steps.

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