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investment in subsdiary

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › investment in subsdiary

  • This topic has 7 replies, 3 voices, and was last updated 6 years ago by MikeLittle.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • November 12, 2016 at 11:20 am #348573
    lkl881024
    Member
    • Topics: 13
    • Replies: 5
    • ☆

    Dear Sir,

    Let say a company had treated the investment in a subsidiary at fv through oci. On the acquisition date, the consideration was $50m but the draft statement in a yr later had shown the investment in sub as $55m.

    My question is that why on consolidation, there will be a reversal of the fv adjustments whereby we have to debit OCI & credit investment in sub of $5m?

    Thanks Sir

    November 12, 2016 at 11:30 am #348576
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22699
    • ☆☆☆☆☆

    “but the draft statement in a yr later had shown the investment in sub as $55m.”

    Why would it? If the investment was %50 million, why would the draft statements now be showing $55 million

    November 12, 2016 at 11:41 am #348577
    lkl881024
    Member
    • Topics: 13
    • Replies: 5
    • ☆

    Sorry Sir,

    Its actually a past yr question from p2 june 2012 q1. The model answer say $5m need to reverse from OCI and credit investment in sub.

    Thanks Sir.

    November 12, 2016 at 12:40 pm #348587
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22699
    • ☆☆☆☆☆

    Probably because it’s been incorrectly credited to OCI and now needs to be reversed

    But if it’s a P2 question, why is it here in F7?

    November 16, 2016 at 10:03 am #349234
    haji89
    Member
    • Topics: 6
    • Replies: 13
    • ☆

    Hello sir,
    @
    When you are told” included in the trade receivable of H ltd (parent ) is $120 due from S ltd (sub).S Ltd included only $70 of this amount in its trade payable.the difference is due to admininstrave expenses charged to S Ltd by H lted which had not been accounted for by S ltd”.who would you treat it?

    November 16, 2016 at 1:19 pm #349254
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22699
    • ☆☆☆☆☆

    What has this got to do with the title of this thread?

    This thread is called “Investment in Subsidiary” (actually it’s called “Investment in Subsdiary” but it means “subsidiary”)

    Your post is irrelevant to this thread

    Please post again, under a new thread with an appropriate title and I shall get back to you, hopefully later today

    November 16, 2016 at 4:23 pm #349293
    haji89
    Member
    • Topics: 6
    • Replies: 13
    • ☆

    Thank you sir

    November 16, 2016 at 4:25 pm #349295
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22699
    • ☆☆☆☆☆

    You’re welcome

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