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

I think part 3d was just to identify that the convertible loan note would give a diluted eps as it’s a converible and then discuss the directors worry of it meaning a lower eps in the future. I said future eps depends on profitability and whether conversion actually takes place therefore his worries are not really valid?

@kevikraze said:
I think part 3d was just to identify that the convertible loan note would give a diluted eps as it’s a converible and then discuss the directors worry of it meaning a lower eps in the future. I said future eps depends on profitability and whether conversion actually takes place therefore his worries are not really valid?

Kevin, as the reaon i mentiined convertible loan note and dilution bla bla bla. Ceo was overreacting because lower eps was just dilution signal, not a bad performance

Ah that’s right gearing ratio one, and then there was impairment one about how much would be attributed to a certain asset or something, can’t remember except the first 7500 I think went to goodwill then the rest was whatever the fraction was for that asset

@kevikraze said:
Ah that’s right gearing ratio one, and then there was impairment one about how much would be attributed to a certain asset or something, can’t remember except the first 7500 I think went to goodwill then the rest was whatever the fraction was for that asset

And you are left with 6500 then make a proportion

@christa316 said:
My post acquisiton profits in all was (1200)

(1000) for just the retained earnings and the FV adjustments plus the add backs for FV .

Then a reduction of (200) for decrease in FV

Is that what you guys got too?

Yeah, -1200

@christa316 said:
What did you guys get for the unrealised profits,

It as 2.43 million. I calculated the Profit Element

and since all was remaining think it was 35% but i got like 8 something and I was thinking I made an error

2.43*35/135

@emo777 said:
There was also a MCQ number 19 about lower acid test ration. I got D, used cash to buy materials and etc

Darn can’t remember what the other options where, I think I remember the cash used was from overdraft or a loan or smt?

@kevikraze said:
Darn can’t remember what the other options where, I think I remember the cash used was from overdraft or a loan or smt?

The variant with ovedraft, you increase payables and decrease them by repaying at the same time, so no change

With cash variant, you by materials, increase inventory and decrease cash, so this seems to be the right option

Oh less the increase for the Finance costs.

For the SOFP – I split my deferred tax asset and deferred tax liability in 2

One for the deferred tax asset for 2500

and I reduce the corresponding liability of 5000 by that same amount

@christa316 said:
Oh yes I did that

decrease by 2500 and added back 500 for the depreciation.

I am talking to the post acquisition reval which ended up with a loss of (200) for the equity instrument.

I was seeing that people deducted that from Goodwill as well

In all I got (1000) loss for just the retained earnings and FV adjustments then there was the (200) for the post acquisition reval

This (1200) was then split between 60% for the Parent and 40% for the subsidiary.

Then for the Parent it included the retained earnings +time apportioned loss + FV increase of 600 – PURP.

What was your answer for PURP

Christa, i see your point, but in our case they said that fair value of equity invedtments at acquisition day was equal to carrying value, so no adjustments

You should have recognized deferred tax asset in goodwill calculation

But it said it was 35% of cost

Didnt it say that the markup was 35% of cost… and wasn’t the cost listed as the cost to the Parent?

Oh thats why I had the difference then. I swore that was the cost to the parent so I calculated the markup to find the profit and that was the PURP