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This exam was quite tricky, because in long questions the adjustments took time to get back to the solution. But i attempt all with a missing part is last 5 marks question & I found my Goodwill positive as well. Hope to get passed in F7 Inshallah
Does anyone have more insight into question 2? Seems many others found the wording confusing about what it actually wanted myself included. Calculated Roce for each year for continued operation only, so from top section listed as continue operating 2016 I used the profit before tax given, added back finance costs/ share holder equity + non current liabilities. For 2016 did the same except took away the 9m from capital employed that was for the discontinued part.
Part b I then went on to calculate, gross profit margin, operating margin, gearing and current ratio, annoyingly there weren’t any big differences to assess between each year except for Roce and that was because of the discontinued operation which lead to higher Roce 2016 ,I calcled Roce again with discontinued back in capital employed and it was then it was a lower Roce in 2016. Done a paragraph on Profitability, liquidity and gearing, waffling on then a conclusion that no going concern issues despite decrease in Roce and also that need more info about rest of industry to draw a conclusion on the drop in Roce.
@cene89 said:
In MCQ, grant question was not 3250? And inventory question wad 33600?Yeah, grant was 325 smth
Inventory i got 51600 cost was lower than nrv so cost
In mcq with consolidated revenues, i took the figure for parent revenue and added 6/12 of subsidiary revenue. Disregarded associate revenue and pre acquisition sale from subsidiary to parent
Also, there was mcq about exemption from consolidation i chose three options there: the one with ultimate parent, no issued securities and not in the process of issuing securities
Could anyone tell which consolidation was in this exam SFP or SCI? Which standard IFRS or IAS? Thanks a lot!
@samirrules said:
Purp was the following in my opinion.There was sales to sub of $2.43 million at a mark up or cost plus of 35%. So Purp = 2.43 million x 35/135 = 0.63 million or $630000 which if I recall correctly was sold by parent so came off parents retained earnings.
As far as I rememver, It wasnt sales, it was cost to parent
If they had given sales then its ok to divide 135 and multible by 35
But here since only the cost was given it should be 2.43* 35/100
Hope I make senseAnyone have any idea about the deferred tax asset in qs 1?
would it have any effect on goodwill calculations? as its only related to parent@accastudent1986 said:
Did you make the total post-acquisition profits to be -1,200?yes, I had the same figure
All I did was sub’s share capital, retained earinings, less fv adjustment and add depreciation, and also deduct 200 at consolidation date
I completely igored the deferred tax asset as i thought its related to parentHow did u arrive this figure?
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MCQ were OK in general but they did through a lot of consolidation there.
Question 1 was not a difficult question, although I didn’t know what to do with that 1.2m deferred tax, so I just ignored it and I got a positive goodwill too.
Question 2 I left it for the end and of course I ran of time and I managed to calculate roce in part a for 2016 only, but I’m not sure I used the correct numbers. Part b I calculated GPM, NPM, Net asset turnover and Current Ratio, but ran out of time for the interpretation.
Question 3 was very time consuming but I think I did well. My sofp did not balance though and I didnt attempt part c.
Bottom line, the exam was not very difficult but 3 hours is not enough for the amount of work you are required to do.
I went there very confident but now I just hope I did enough to pass!
@gawcram said:
As far as I rememver, It wasnt sales, it was cost to parent
If they had given sales then its ok to divide 135 and multible by 35
But here since only the cost was given it should be 2.43* 35/100
Hope I make senseIt was cost to daughter, so it was sales, I think.
Anyone remember the question about non-profit firms, MCQ? I do not remember and do not understand.
@gawcram said:
yes, I had the same figure
All I did was sub’s share capital, retained earinings, less fv adjustment and add depreciation, and also deduct 200 at consolidation date
I completely igored the deferred tax asset as i thought its related to parentHow did u arrive this figure?
Remind me what the question said about the deferred tax asset/liability?
@gawcram said:
As far as I rememver, It wasnt sales, it was cost to parent
If they had given sales then its ok to divide 135 and multible by 35
But here since only the cost was given it should be 2.43* 35/100
Hope I make senseNo, it should have bedn 2.43 multiplied by 35 divided by 135
@gawcram said:
Anyone have any idea about the deferred tax asset in qs 1?
would it have any effect on goodwill calculations? as its only related to parentYou should take deferred tax asset in fv adjustments for goodwill only, then forget about it
@gawcram said:
yes, I had the same figure
All I did was sub’s share capital, retained earinings, less fv adjustment and add depreciation, and also deduct 200 at consolidation date
I completely igored the deferred tax asset as i thought its related to parentHow did u arrive this figure?
You were correct in ignoring it. It is not amortized either. Pre acquisition were 7100, then deduct them from 5600 retained earnings in 2016
@emo777 said:
No, it should have bedn 2.43 multiplied by 35 divided by 135Cost was ($2.43m/1.35) = $1.8m so total profit ($2.43m-$1.8m) = $630K
@accastudent1986 said:
Remind me what the question said about the deferred tax asset/liability?She means q1
@accastudent1986 said:
Cost was ($2.43m/1.35) = $1.8m so total profit ($2.43m-$1.8m) = $630KBro its the same answer as with my calculation
@anna777 said:
It was cost to daughter, so it was sales, I think.Anyone remember the question about non-profit firms, MCQ? I do not remember and do not understand.
Anna it was option A. Maximization of shareholder wealth and roce for profit organizatiin, non financial objectives for non profit organizations
@gawcram said:
yes, I had the same figure
All I did was sub’s share capital, retained earinings, less fv adjustment and add depreciation, and also deduct 200 at consolidation date
I completely igored the deferred tax asset as i thought its related to parentHow did u arrive this figure?
There were no any fv adjustments for subsidiary, only one where you add depreciation
@emo777 said:
No, it should have bedn 2.43 multiplied by 35 divided by 135Qustion says something like this
35% mark up on cost
and they mentioned the cost to parent is 2.43
which means if the cost is 100 they would sell 135, profit is 35
if they had mentioned parent sold 2.43 then u are right
but here they mentioned 2.43 is only the cost to parent- Topics: 0
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I deducted 6 moths of it from retained earnings, cant remember the figure now, as well as PURP
I think the right treatment in the net assets was to deduct fv adjustment and add fv depreciation but I deducted instead and got a post acquisition loss…
@emo777 said:
Bro its the same answer as with my calculationyou are considering 2.43 as sales which means cost plus profit
but qustion says 2.43 is only cost
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