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Items under OCI mid year acquisition and consolidated SOPL

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Items under OCI mid year acquisition and consolidated SOPL

  • This topic has 1 reply, 2 voices, and was last updated 4 weeks ago by P2-D2.
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  • Author
    Posts
  • July 8, 2022 at 4:13 am #660140
    huiking
    • Topics: 5
    • Replies: 0
    • ☆

    Dear tutor,
    I came across the topic of OCI item in chapter CSOPL Kaplan, and the following is extracted from the study text.
    Pepper bought 70% of Salt on 1 July 20X6. Pepper and Salt financial year end was
    31 March 20X7.
    Salt’s land increased in value by $500 over its value at the date of
    acquisition and there was a loss on its financial assets held at fair value
    through other comprehensive income (per IFRS 9, Chapter 9) for the
    year of $100. All items are deemed to accrue evenly over time except
    where otherwise indicated.
    Answer extract:
    Other comprehensive income:
    Gain on revaluation of land 500
    Loss on financial assets (100 × 9/12) (75)

    My question is what is the reason that the “loss on financial assets” need to time-apportion since this value should be “FV at year end – carrying value” which is the same concept as the revaluation. My opinion is that it should not be time-apportioned as it is not happening throughout the year.

    Thank you

    July 10, 2022 at 8:09 pm #660254
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6158
    • ☆☆☆☆☆

    Hi,

    The question states that the gains/losses accrue evenly over the year except where stated. It specifically says that there was a loss for the year and it doesn’t say that it was at a particular point in time, where it wouldn’t time apportioned and so here it will be time apportioned.

    Thanks

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    Posts
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