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Goodwill Calculation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Goodwill Calculation

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by Stephen Widberg.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • June 13, 2022 at 2:01 pm #658636
    tjenkins3005@gmail.com
    Participant
    • Topics: 5
    • Replies: 6
    • ☆

    Good Afternoon,

    I have just sat my SBR exam and was happy with how I performed except for Q1 I was asked to calculate GW based on cash paid, a cash payment in 2 years and a equity settled share based payment. I made a big error instead of using the PV in 2 years I used the annuity factor and effectively increased the £12m to £20m when it should have been £10m at PV. Everything else was as I wanted in regards to share based payment and NCI.

    I fully wrote out how to do the calculation explaining that the cash payment due was a contractual obligation and so needs to be included in the calculation at PV then linked to the calculation (which used the annuity factor) will I lose a mark based on this or lose marks for the whole explanation as it’s a material error?

    Also it asked to recalculate goodwill at YE but I thought we do not recalculate GW only check carry amount for recoverable amount for impairment and as assets increased in value there would be no adjustment to GW.

    How do you think the markers will view this mistake?

    Thank you for your help

    June 14, 2022 at 7:32 am #658689
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3411
    • ☆☆☆☆☆

    Can’t be very specific. But:

    1. If a calculation contains a single error, you do not necessarily lose a mark. There’s no such thing as a material error – unless you think that a question about goodwill is a question about sausages.
    2. Follow through marks are given where you make an error which impacts on, say, a later calculation.

    Be calm.

    Best I can do. 🙂

    June 14, 2022 at 6:58 pm #658746
    tjenkins3005@gmail.com
    Participant
    • Topics: 5
    • Replies: 6
    • ☆

    Ok great thanks for the advice, let’s see what happens in a few weeks time….

    Thank you

    June 15, 2022 at 8:57 am #658794
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3411
    • ☆☆☆☆☆

    🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Goodwill Calculation’ is closed to new replies.

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