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- This topic has 7 replies, 2 voices, and was last updated 2 years ago by
Stephen Widberg.
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- November 20, 2022 at 9:08 pm #671949
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 #671965Perfect. Same logic as PURP for associate.
DR INVESTMENT 11.5
CR PPE 6
CR INT 3
CR P&L 2.5Remember NOT to write journals in the exam unless you are asked for adjustments.
Journals are NOT explanations.
🙂
November 21, 2022 at 9:34 am #671979Thank 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 #672064But 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 #672065But 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 #672066But 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 #672100Got it…Thanks a lot!
Really appreciate for your efforts to help all studentsNovember 23, 2022 at 2:23 pm #672222🙂
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