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consolidation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › consolidation

  • This topic has 3 replies, 3 voices, and was last updated 11 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • May 12, 2014 at 6:27 am #168436
    minakshi
    Member
    • Topics: 2
    • Replies: 1
    • ☆

    how to calculate consolidated accumulated profits for Hardy question

    May 12, 2014 at 10:52 am #168452
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23314
    • ☆☆☆☆☆

    There is a recorded worked answer to Hardy on this site

    May 16, 2014 at 2:54 am #168975
    clunisd
    Member
    • Topics: 7
    • Replies: 7
    • ☆

    hi Mike, i have been looking at the dec 2013 pass exam ques. polestar and southstar, my ques is why isnt the increase in fair value of the southstar asset at the date of acquistion not carried in the income statement as other comprehensive income and shared between parent and nci, but the decrease in the contingent consider was treat through the profit or loss?

    May 16, 2014 at 11:11 am #169025
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23314
    • ☆☆☆☆☆

    The fair value adjustment is not post-acquisition, it’s as at the date of acquisition. The adjustment for the fair value is reflected within the calculation of working W2 Goodwill as affecting the fair value of assets at date of acquisition. There is an affect also on the depreciation charge post acquisition because the fair value adjustment needs to be depreciated over ten years. That “additional” depreciation is accounted for in working W3 Consolidated Retained Earnings

    Re the contingent consideration, the movement from $1.8 to $1.5 IS post-acquisition. However, as at date of acquisition, the best estimate was $1.8 and that’s the figure we have to use in the goodwill calculation (W2)

    A change in the estimate of the contingent consideration is NOT reflected in any re-calculation of goodwill. Instead, such a change will be reflected in the Income Statement and in working W3 Consolidated Retained Earnings

    The same situation arose in the June 2010 question Picant

    OK?

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