Example 5 – Group SFP OT Notes, chapter CHANGES IN GROUP STRUCTURE

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August 26, 2017 at 12:10 pm #403655
bik123
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Hi,

quick question regarding lecture-ACCA P2 Group SFP – Change in structure – Example 5.

During the lecture you explain how to process entries for step aquistion, step disposal, specifically how to adjust NCI, cash, and OCE. And then you say that we don’t have to adjust cash because it is already done in consolidated FS, how do you know that?

By the way, great lecture, I wouldn’t pass this exam without your lecture.

Thanks
August 29, 2017 at 7:47 pm #404139
P2-D2
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Hi,

Thanks for the kind comments, not sure we’ve had many people from Luxembourg previously, so welcome.

As the individual accounts of the parent balance the cash entries must have been processed in either acquiring or disposing of the shares.

If we use the investment in Jones as an example, it would initially have been Cr Bank 120m Dr Investment 120m and now there has been a disposal they would have Dr Bank 35m Cr Investment 35m. If you net the investments off then you get 85m, which is shown in the SFP.

Thanks
August 30, 2017 at 7:55 am #404247
bik123
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Thank you, make sense now.
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