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Investment in JV

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Investment in JV

  • This topic has 7 replies, 2 voices, and was last updated 2 years ago by Stephen Widberg.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • November 20, 2022 at 9:08 pm #671949
    Varun.J.Thakkar
    Participant
    • Topics: 75
    • Replies: 112
    • ☆☆

    Dear sir,
    In Sept/Dec 2019 Q (Digiwire)
    In the calculation of profit on disposal of assets, they have taken only 50% of profit
    Why?
    Is it like similar to PURP in associate
    Which means that total profit is $5m
    But since it owns 50% of joint venture
    So the profit will be 5m – (50%*5m)
    ie 2.5m
    Kindly tell if my logic is right
    Thanks!

    Could you pls provide me with the journal entry with amt..would really appreciate

    November 21, 2022 at 5:10 am #671965
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3417
    • ☆☆☆☆☆

    Perfect. Same logic as PURP for associate.

    DR INVESTMENT 11.5
    CR PPE 6
    CR INT 3
    CR P&L 2.5

    Remember NOT to write journals in the exam unless you are asked for adjustments.

    Journals are NOT explanations.

    🙂

    November 21, 2022 at 9:34 am #671979
    Varun.J.Thakkar
    Participant
    • Topics: 75
    • Replies: 112
    • ☆☆

    Thank you…specially for journal entry( had just asked for clarity) ?
    If i “explained” like this ?

    Investment in joint venture
    Cost of investment $14m
    (FV of consideration paid)
    (-) PURP Share ($2.5m)
    = Carrying amt $11.5m
    It would be right too…right??

    November 22, 2022 at 2:05 pm #672064
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3417
    • ☆☆☆☆☆

    But it would be better as a sentence. EG The JV investment can be calculated by deducting the unrealised profit from the fair value of the consideration paid.

    November 22, 2022 at 2:05 pm #672065
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3417
    • ☆☆☆☆☆

    But it would be better as a sentence. EG The JV investment can be calculated by deducting the unrealised profit from the fair value of the consideration paid.

    November 22, 2022 at 2:06 pm #672066
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3417
    • ☆☆☆☆☆

    But it would be better as a sentence. EG The JV investment can be calculated by deducting the unrealised profit from the fair value of the consideration paid.

    November 22, 2022 at 11:38 pm #672100
    Varun.J.Thakkar
    Participant
    • Topics: 75
    • Replies: 112
    • ☆☆

    Got it…Thanks a lot!
    Really appreciate for your efforts to help all students

    November 23, 2022 at 2:23 pm #672222
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3417
    • ☆☆☆☆☆

    🙂

  • Author
    Posts
Viewing 8 posts - 1 through 8 (of 8 total)
  • The topic ‘Investment in JV’ is closed to new replies.

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