*** F7 June 2016 Exam was.. Instant Poll and comments ***

@accastudent1986 said:
So does anyone else agree that the answer to question 1 should be;

Goodwill:
Consideration on acquisition (W1) 10,800
NCI at date of acquisition ((9,000*40%)*$1.50) 5,400
Sub-total 16,200
Less: Fair value of subsidiary’s net assets at date of acquisition (W2) 13,600
Goodwill 2,600

Retained earnings:
Parent’s retained earnings 17,200
Group share of post-acquisition earnings -720
Less: PURP on inventory -630
Group retained earnings 15,850

NCI:
NCI value at date of acquisition 5,400
NCI share of post-acquisition earnings -480
NCI at year-end 4,920

Agree with you on nci, however, again disagree with parent retained earnings. You deducted purp, ok, you deducted 720, ok, u forgot to deduct 6/12 unwinding interest and add gain on equity asset revaluation. You found loss on equity asset revaluation as for subsidiary, thats how you got -1200, but why didnt u do the same for parent?

Geshi, its for you. There was a mcq related to exemption from consolidation. I chose 3 options: ultimate parent publishes, shares are not traded and not in the process of issuing

@accastudent1986 said:
Here’s how i calculated sub’s net assets;

Date of acquisition Year-end Post-acquisition
Share capital 9,000 9,000 –
Retained Earnings 7,100 5,600 -1,500
FV adj -2,500 -2,500 –
FV depreciation adj -500 500 –
FV adj financial asset – -200 -200
13,600 12,400 -1,200

The only difference between your 13600 and my 14800 is the fact that u missed deferred tax asset

@emo777 said:
Agree with you on nci, however, again disagree with parent retained earnings. You deducted purp, ok, you deducted 720, ok, u forgot to deduct 6/12 unwinding interest and add gain on equity asset revaluation. You found loss on equity asset revaluation as for subsidiary, thats how you got -1200, but why didnt u do the same for parent?

Ahhh you’re right i should have removed 108 from group retained earnings for the deferred consideration interest 🙁

Regarding the tax asset, you’re saying i should have increased the sub’s reporting date and and date of acq position by 1,200?

@emo777 said:
Something irrelevant. Like they buy subsidiary to sell it or smth

No that’s right it was the correct answer as parent can be exempt from preparing consolidated statements if the subsidiary is held for resale (regarded as investment property effectively). I selected that, the parent produces and the shares not publicly traded

@accastudent1986 said:
No that’s right it was the correct answer as parent can be exempt from preparing consolidated statements if the subsidiary is held for resale (regarded as investment property effectively). I selected that, the parent produces and the shares not publicly traded

No, there is no such a requirement.

@abatesi said:
still wondering if actually we needed to use deferred tax asset in the goodwill calculation????

Yes. Why not?

@emo777 said:
No, there is no such a requirement.

Just revisited the textbook and this one might be open for debate;

“Subsidiary held for resale

If on acquisition a subsidiary meets the criteria to be classified as ‘held for sale’ in accordance with IFRS 5, then it must still be included in the consolidation but accounted for in accordance with that standard. The parent’s interest will be presented separately as a single figure on the face of the consolidated statement of financial position, rather than being consolidated like any other subsidiary.”

@accastudent1986 said:
Just revisited the textbook and this one might be open for debate;

“Subsidiary held for resale

If on acquisition a subsidiary meets the criteria to be classified as ‘held for sale’ in accordance with IFRS 5, then it must still be included in the consolidation but accounted for in accordance with that standard. The parent’s interest will be presented separately as a single figure on the face of the consolidated statement of financial position, rather than being consolidated like any other subsidiary.”

They were exluded, then ifrs 5 removed this exlusion

@cene89 said:
Yes, it was 93.400..I think! There was some intra group balance..I think

Yes, but it was pre acquisiton, so removed by multyplying subsidiary revenue by 6/12

@accastudent1986 said:
Damn! I’m loosing more and more points every time i think about the answers i gave!

However, a parent need not present consolidated financial statements if it meets all of the following conditions: [IFRS 10:4(a)]

it is a wholly-owned subsidiary or is a partially-owned subsidiary of another entity and its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent not presenting consolidated financial statements its debt or equity instruments are not traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets) it did not file, nor is it in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market, and its ultimate or any intermediate parent of the parent produces financial statements available for public use that comply with IFRSs, in which subsidiaries are consolidated or are measured at fair value through profit or loss in accordance with IFRS 10.*

am saying that because i think the deferred tax asset was relating the parent and not the subsidiary,…….