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FA Revision kit 25.2/25.4

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › FA Revision kit 25.2/25.4

  • This topic has 3 replies, 2 voices, and was last updated 1 year ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 4, 2021 at 5:55 am #630332
    y25u4
    Member
    • Topics: 2
    • Replies: 1
    • ☆

    Good day Mr. Moffat ,
    in question 25.2 the % of non controlling interest in task 5 when asked the amount of non controlling interest in the SOPL is shown as 30%. .
    I understand we use the profit for the year for Bury and multiply by the % of controlling interest.
    but why is the % of controlling interest 30%
    what information indicates this. By my logic the % of non controlling interest would be 11,800/total value, which is 32800. but that works out to be a percentage of 35.9%
    I have the same issue with the subsequent part of task 3 relating to the share of post aquisition retained earnings .
    Also in 25.4 , when finding the attributable profit for NCI a percentage of 25% is used.
    How do we determine this?

    August 4, 2021 at 8:33 am #630344
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51561
    • ☆☆☆☆☆

    Bury has 30M shares in issue (as per their SOFP).

    Black owns 21M shares in Bury.

    Therefore Black owns 21/30 = 70% and the non-controlling interest is 30%.
    (The $11.8M is the fair value of the non-controlling interest at the date of acquisition)

    In question 25.4, Liverton owns 3M shares in Everpool Everpool has 4M shares in issue. Therefore Liverton owns 3/4 = 75% and the non-controlling interest is 25%.

    I do suggest that you watch my free lectures on this. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.

    August 4, 2021 at 5:23 pm #630400
    y25u4
    Member
    • Topics: 2
    • Replies: 1
    • ☆

    ah sir yes i see now a bit silly on my part . i have watched all the lectures and through them been able to grasp a good understanding of the paper.
    However, one small issue . i understand liverton has 3mil shares in everpool . But wont we value them at 3.5mil as stated in the question?
    Or do we normally value of % control based on the number of shares owned as opposed to the value of shares owned?

    August 5, 2021 at 7:31 am #630440
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51561
    • ☆☆☆☆☆

    Control is calculated based on the number of shares.

    The fair value of the NCI is only relevant when calculating the goodwill arising on consolidation.

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