*** F7 June 2012 Exam was… Comments and Instant Poll ***

@rajani_kkr said:
hey can anyone tell me their balance of sofp in question no. 2… dat was the only question which i didnt hav been balanced otherwise consolidated sofp was balanced on 126300 and cash flow was also awsum 🙂

I think, not so sure, it was something like 117,000…

@ahmedmirza said:
Hello there..

I think the investment in Cube was given in the SoFP at value of $6m. What I did was accounted the share of profits of $600,000 ($2m (Post-acqusition R/E) X 30%)

Please let me know if any of you have a different idea.

I think you were supposed to time apportion it for six months also, since the associate was bought in October, and the accounts were made in March.

the associate profit was mentioned by saying that associate made that much profit in six months so i dont think v have to time apportion that

m i ryt???

Also had a loss on Q2. In terms of answering the EPS bit if you got the profit wrong from previous part that won’t matter.

But you had to use the $1.20 to get the cum rights price/theoretical ex rights price and work out the weighted average of shares as there was an issue in year.

Happy with Q2 as I gave the lease bit a good go and confident with the tax/deferred tax part and all other non current assets revaluations etc.

Q1 was fine apart from the cash in transit/unrecorded rec’bles/payables. But thats going to be like 4 marks tops and I gave it a go so should get something.

Q3 cashflow was reasonable seemed quite short as not much going on in terms of complications. Second part for 14 marks ratios ok calculated about 6, written part not my strongest.

Q4 – BOOM. Great question for me Impairments I hope to get at least 10 marks on this. Really happy with my answers, might have just missed the cash/receivabbles being at fair value and therefore could not impair. However all the others were fine.

Q5 – pushed for time but got bullet point answers for both parts. 3 or 4 marks and I’ll be happy.

Overall, quite tough and challenging but worked through the best I could and would be disappointed to fail even if I don’t think it will be a confident pass.

I got 126300 for total assets for Qt1 as well.
The associate profit was 600,000. No need for time apportioned as it was mentioned that it was increased by 2 M over 6 months.
Qt2: Got most workings done but was short of time so finished Comprehensive income statement …loss of around 6,050 I think. Got depreciation worked out and got assets done on FS. Statement of equity required prior year restatement for 1 million.
Qt3 Missed the dividend in cash flow, off by 55 or 45K cannot remember.
Qt4 a 1st Item comes to 514,000 or so value in use. No impairment
Qt 4b Patent 1 M Plant 1960 factory 2240 Receivables 1500 total 6.7 M
Qt 5: 6 advantages that is really a stretch. I doubt IFRSF could come up with that many

@saiflalani said:
I got 126300 for total assets for Qt1 as well.
The associate profit was 600,000. No need for time apportioned as it was mentioned that it was increased by 2 M over 6 months.
Qt2: Got most workings done but was short of time so finished Comprehensive income statement …loss of around 6,050 I think. Got depreciation worked out and got assets done on FS. Statement of equity required prior year restatement for 1 million.
Qt3 Missed the dividend in cash flow, off by 55 or 45K cannot remember.
Qt4 a 1st Item comes to 514,000 or so value in use. No impairment
Qt 4b Patent 1 M Plant 1960 factory 2240 Receivables 1500 total 6.7 M
Qt 5: 6 advantages that is really a stretch. I doubt IFRSF could come up with that many

Question 4b I think i got a different answer with you.
My Plant is1800
Factory is 2400
the rest are the same

what if I answered part (b) in Q3 without referring to the financial statements given in the question? Can I still earn some marks? The requirement did not specifically ask to interpret financial statement. So I answered in general words how the given 3 cases may affect the financial statements (say if a company obtain a loan to purchase PPE interest expenses would be most probably greater and net profit margin would be lower.

@jm84 said:
Question 4b I think i got a different answer with you.
My Plant is1800
Factory is 2400
the rest are the same

Thanks JM84. good to know.
I thought that the factory and Plant had pre accident values of 4.0 and 3.5 million. and end values of total 4.2 million, 6.7 – 1.5 minus 1 i.e 4.2.
So 4.2/7.5 =0.56 * 3500 and 4000 = 1960 and 2240. Maybe i misread the values.

On question 1 could someone please advise if they got good will …. I’m getting worried now as I’m seeing bargain purchase mentioned a few times… overall bad paper for me but just that one thing if you could let me know people..

@polldoll said:
Don’t worry, pretty sure there was goodwill (not a bargain purchase) if you accounted for consideration as the shares shown in the parent’s SoFP and the deferred cash payment. Can’t remember the figures.

Yeah. I think total consideration was 30.4 Million and the net assets were valued around 27-28 million. There was definitely goodwill. No bargain purchase.
If people ignored the 6.4 Million of deferred consideration then yes you would get a bargain purchase but that would be wrong.

consolidation question
80% shares were acquired by parent and subsidiary share capital was 10,000 $1 each so $8000 were acquired on exchange of shares and what amount of shares give up by parent not given in a question and a deferred payment of 88 cents per share was paid so :_ cost of capital 10%
8000 * 0.88 = 7040* 0.909 =6400
6400+8000= 14400 i think that was the cost of investment in subsidiary and fair value of net assets was more than this amount which results in bargain purchase MR SAIFLALANI

Don’t worry. I’ve completely forgot that there was a last question 10 marks, I was so stressed. I wish to score out of remaining 90 marks. Let’s wait untill 8 of August, when the results will be announced, than we shall see..;)

@marky123 said:
Hi guys, I just got home from doing F7 & F8.
I thought F7 was minly OK – Q1, 2 & 3 were as expected apart from I wasnt expecting as much discussion regarding the cashflow which has probably let me down – I would have preferred a larger proportion of marks for the cashflow and less for the interpretation.
For me, question 4 was acomplete disaster and I have effectively reduced my chances of passing to an 85 mark exam in which I have to score 50! :((
And my biggest dissapointment – I totally forgot to go back and answer the EPS question which was worth 3 marks. It totally slipped my mind so I never even attempted it. I know I could have scored at least 2 out of the 3 marks on this so I will be devastated if I fail with 48!
Nothing I can do about it now I suppose it was just a careless mistake! 🙁 Ive learned my lesson.
Oh – and the subject of Goodwill – I didnt get a bargain purchase I think my calculation came to $7,400…..
Best of luck folks…

@saiflalani said:
Yeah. I think total consideration was 30.4 Million and the net assets were valued around 27-28 million. There was definitely goodwill. No bargain purchase.
If people ignored the 6.4 Million of deferred consideration then yes you would get a bargain purchase but that would be wrong.

@saiflalani said:
On the balance sheet P recognized investment at cost as $24,000. That is 8000 $1 shares and $2 share premium. the qt said that It had already recognized share cost but not deferred consideration. Any one else feel free to step in.

@angang2011 said:
If I remember correct, cost of investments was 24000 and there was a goodwill, not a bargain purchase

Also How can 80% of the company be valued at 14.0 Million when the qt says Fair value of NCI for remaining 20% was 7.0 Million. How is that even close to fair value?