• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

June 2025 ACCA Exam Results

Comments & Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for June 2025 exams.
Get your discount code >>

Consolidations (share exchange)

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Consolidations (share exchange)

  • This topic has 3 replies, 3 voices, and was last updated 9 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 16, 2015 at 10:49 am #276630
    anniebabe
    Participant
    • Topics: 33
    • Replies: 102
    • ☆☆

    Hello I am working through Kaplan text, page 460/461
    Test your understanding 3 – Cost of Investment

    P acquired 60% of S on 1 July 20X7 when the retained earnings of S were $5800. P paid $5000 in cash. P also issued 2 $1 shares for every 5 acquired in S and agreed to pay a further $2000 in 3 years time.
    The market value of Ps shares at 1 July 20X7 was $1.80. P has only recorded the cash paid in respect of the investment in S. Current interest rates are 6%
    The P group uses the fair value method to value the nci. At the date of acquisition the FV of the nci was $5750.

    My question is this :-

    It is my understanding that Share Capital/Premium was only – ever of the parent but in the answer they have added another figure to the SC/SP
    I am presuming this is to do with the 2/5 issue, but confused how they have worked it out.
    The Share Capital figure in the question is $6000 (P) and $5000 (S) Share Premium $4000 (P).
    the answer consolidation says Share capital is (6000+1200) and Share premium is (4000+960)
    Sorry if this is a silly question, but I have had a block with this, if anyone can answer.
    Thank you.

    October 16, 2015 at 11:37 am #276633
    anniebabe
    Participant
    • Topics: 33
    • Replies: 102
    • ☆☆

    Right I have worked out the calculation
    5000 x 2/5 x 60% = 1200

    Share Capital 1200
    Share Premium 1200 x 0.80 = 960

    But not totally sure why I have done it
    Can anyone explain
    Bit confused with the share exchanges

    Thanks

    October 16, 2015 at 4:15 pm #276686
    submeyar
    Member
    • Topics: 3
    • Replies: 2
    • ☆

    Good Luck

    October 17, 2015 at 12:15 pm #276797
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    Annie, ask this on the Ask the Tutor page and I’ll answer it

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • verweijlisa on Financial performance – Example 2 – ACCA Financial Reporting (FR)
  • John Moffat on Linear Programming – Spare capacity and Shadow prices – ACCA Performance Management (PM)
  • John Moffat on The Statement of Financial Position and Income Statement (part d)
  • Salexy on Linear Programming – Spare capacity and Shadow prices – ACCA Performance Management (PM)
  • omerbasheer on The Statement of Financial Position and Income Statement (part d)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in