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Dear Mike,
When answering consolidation question, is it necessary to fill all answers from the workings into consolidated statement of financial position? As time pressure is high, will we be penalized if only workings will be calculated?
Thank you in advance.
Rasa
That sounds like a Lithuanian question to me!
I can’t count how many times I have said “The marks are in the workings”
If you have time, transfer the workings figures into the appropriate statement.
If you don’t have time (AFTER having completed ALL the workings) then don’t
Simple as that! Finished the workings? No? Move on to next question
Finished the workings? Yes? Still within time allocation for the question? (63 minutes) No? Move on
Finished the workings? Yes? Still within time allocation for the question? (63 minutes) Yes? Start transferring to the appropriate statement
Still transferring? Yes? Still within time allocation? No? Move on
Hi Mike,
Indeed it’s Lithuanian concern 🙂 Thanks for re-confirming, as I thought that workings are the most important, but after listening to Exam prep video from Becker, the speaker Phil Bradbury said that examiners expects to find the answers in Financial Position instead of looking for them in workings, and that we should spend time on preparing pro forma of consolidated FS, line by line, as soon as we have each answer. That’s why I got confused, but if you believe that we shouldn’t lose points, so I agree with you not to waist time on it.
Thanks 🙂
Vilnius or Kaunas?
Never mind what PB says.
However …… a question will ask you for, say, a statement of financial position. And that’s what your answer will provide in an ideal world.
But if you haven’t finished the workings by the end of your 63 minutes time allocation ….. sod the statement of financial position. The marks are in the workings
PB is, in my view, talking yow choo kaka (I know it’s spelt incorrectly but I don’t want non-Lietuviski speakers looking it up!)
Thanks Mike for your time in answering my queries. I am actually from Kaunas but live now in Vilnius 🙂
Mike,
I have one more question. could you please advice when to use Net Assets figure for calculating goodwill impairment, and when we should use Total assets figure for goodwill impairment? I got confused by looking at the Dec 2011 and Dec 2012 exam questions 1, when in one case Total assets were used, while in other Net assets were used.
Thank you.
In the question when total assets were used instead of the usual net asset figure, the question specifically stated that you had to use total assets.
I can’t remember any other occasion when this examiner has asked you to use total assets so, if it comes in the exam, it will most probably be net assets …… but watch out!
The message? RTFQ
Was this the key indication that total assets should be used: “the recoverable amount has been determined without consideration of liabilities”, if yes, so it is tricky, as it took me awhile to figure it out, and having in mind the exam pressure, the examiner really challenges us out 🙂
Sorry, one more question, in Dec12 exam, investment in Associate, regarding the received dividend, I am confused with the necessary entries. Received dividend $2m: Cr Income, Dr Cash, then if Cr Investment in Associate, where another debit goes? Or was it assumed that we were entitled to the dividend but it wasn’t paid by cash, therefore we reduced the investment value? Should we always assume that it is not paid, unless it’s specifically told?
Parent investing company will Dr Cash, Cr Investment Income
On consolidation Dr Investment in Associate, Cr Retained Earnings
OK?
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