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@tybenmillie said:
Contract – Did no one else recog there would b a loss on the contractCost to date £15M
Expected Cost £24
Total Costs £39Revenue £30
Loss on contract £9 this should be recog straight away !!!???
I’m fairly sure it said expected total cost rather than expected cost to complete giving a profit of 6m?
Yeah, I would have took this to mean total costs on contract of 24m, hence prof of 6m
negative good will? did you include the deferred tax asset as part of the assets of the sub?
Goodwill
Consideration paid: 9000*0.6*1/2*$x
Deferred cash: 9000*0.54*0.6*(1/1.08)
FV @ AQN of NCI: 0.4*9000*$1.5
Net assets of S: Can’t remember but included something below FV which reduced their net assets
Also included deferred tax as an asset
Share capital of SI didn’t get negative good will though..
I got your figures Jimbob at the top and ended up with £1,000 goodwill after allowing the deferred tax asset.
Section A loads of B’s for me too. three in a row at one point. few C’s.
Ran out of time right at the end so couldn’t review anything I’d done. Very time pressured and I was writing none stop for 3 hours!@jimbob1212 said:
Goodwill
Consideration paid: 9000*0.6*1/2*$x
Deferred cash: 9000*0.54*0.6*(1/1.08)
FV @ AQN of NCI: 0.4*9000*$1.5
Net assets of S: Can’t remember but included something below FV which reduced their net assets
Also included deferred tax as an asset
Share capital of SI didn’t get negative good will though..
I had the same as you i deducted the fair value variance of the asset and added back the difference in depreciation
@lee.gibson said:
I got your figures Jimbob at the top and ended up with £1,000 goodwill after allowing the deferred tax asset.
Section A loads of B’s for me too. three in a row at one point. few C’s.
Ran out of time right at the end so couldn’t review anything I’d done. Very time pressured and I was writing none stop for 3 hours!Did you make the total post-acquisition profits to be -1,200?
@jimbob1212 said:
Goodwill
Consideration paid: 9000*0.6*1/2*$x
Deferred cash: 9000*0.54*0.6*(1/1.08)
FV @ AQN of NCI: 0.4*9000*$1.5
Net assets of S: Can’t remember but included something below FV which reduced their net assets
Also included deferred tax as an asset
Share capital of SI didn’t get negative good will though..
I think it was designed so that if you INCREASED the fair value you got negative, decreasing or ignoring with give you positive.
Sneaky
Good man Jimbob .. I like the look of those calcs .. Can you remember roughly what your gw was .. Think mine was 7200 or something like that so I’m thinking I missed something in the NCA acq’d.
We’re we meant to reduce ret earnings by the unwindof the deferred too – don’t think I done this.
For the peeps who got the neg gw, what were your NCA acq’d … Must have been something big in there.
Does anyone know what ratio’s were most relevant and what elements the analysis should of focused on?
Just realised I used the neg post acq ret earnings, hence the large amt of goodwill. Hopefully only lose a mark or two for that .. Should we have reduced Parent ret earns by the disc unwind in part b?
Yep so I for the unwinding bit I literally took 8% of the deferred consideration, and then 6/12 months as finance cost was only for 6 months..and then yes took it out of retained earnings along with the PUP etc..can’t remember G/W figure but if it was negative then I’m sure they would have had it for a 30 marker as it would have it’s major impacts on the P&L side, I might be wrong though?
Question 2 was really hard I thought
Question 3 I made stupid mistakes like working out deferred revenue but not including on the balance sheet..
MCQ’s were so hard I thought, again I think I’m in the minority here..
I think overall the exam was similar to previous papers, very time pressured.
Spent far to long on Q3 which I did first but did get the contract asset, equity options and unwinding discount on the loan notes so hopefully some good marks going for them.
MCQ were okay I also got 3b in a row. Wordy ones were nasty where there was one obvious wrong answer and then choose between the remainders when only two were right.
Q1 got positive goodwill NCA was reval down so increased goodwill and I think added back 500 to subs retained earnings in respect of reduced depreciation for the 6 months?
Q2 was awful for me, didn’t have much to go on, did profit ratios, gearing and asset turnover. Waffled on and I would be lucky to get a couple of marks.
Good luck everyone!
@jimbob1212 said:
Yep so I for the unwinding bit I literally took 8% of the deferred consideration, and then 6/12 months as finance cost was only for 6 months..and then yes took it out of retained earnings along with the PUP etc..can’t remember G/W figure but if it was negative then I’m sure they would have had it for a 30 marker as it would have it’s major impacts on the P&L side, I might be wrong though?Question 2 was really hard I thought
Question 3 I made stupid mistakes like working out deferred revenue but not including on the balance sheet..
MCQ’s were so hard I thought, again I think I’m in the minority here..
Jimbo, u are right about q1. Regarding q3, deferred revenue is 1,500,000 and then u have 500000 as a current liability and 1000000 as non current
The -1200 was the total post acq.profit of the S, and not the whole Retain Earnings…yes?
Q1. U should have got -1200 retained earnings for Medda subsidiary. 500 depreciation is added back
@cene89 said:
The -1200 was the total post acq.profit of the S, and not the whole Retain Earnings…yes?Yes, then u multiply it by 0.6
@accastudent1986 said:
The contract asset said that the balance (of $5m) in assets was relating to costs incurred TD and that $10m had been received from customer already so total costs TD were $15m and total expected costs were $24m and total expected revenue was $30m so 15m/24m = 62.5% and 62.5% of $30m = $18.75mThat would mean to add $18.75m revenue, add $15m to cost of sales?
Exactly, thats how it should be done. Got 62.5. Then find revenue and cogs and add them
Q3 the contract asset just include in current asset statement. Regarding revenue, i substracted 16, then added 18 and 500. Remaining 1500000 is deferred income
Q3 contract asset: 15 plus the 3750 profir minus 10 invoiced. Its contract assest. U dont have receivables related to this bevause 10 was both invoiced and paid
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