- October 31, 2015 at 2:03 pm #279805evgeniia85Member
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- Replies: 7
Hello, dear Tutor
I have question to Example #1 (Ausra and Danute) in Open tuition course notes P2 for dec 2015 session: How proportion 5:7 has been calculated?
Thank you very much
EvgeniiaOctober 31, 2015 at 3:09 pm #279818
I believe that it’s the number of months pre-acquisition compared with the number of months post-acquisitionNovember 1, 2015 at 10:52 am #279897evgeniia85Member
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- Replies: 7
🙂 Thanks a lot! very easy.November 1, 2015 at 11:26 am #279902
Hmm, yes, it was wasn’t it!November 2, 2015 at 8:15 am #280023
In course notes P2 in Chapter 1, Example 1 (Ausra and Danute), you mentioned that if we want to practice different type of share exchange payments for acquisition we could find different exercises at the end of the notes? Could you please specify where those examples are, as I can’t find them. Thanks a lot!
Rasa.November 2, 2015 at 8:50 am #280032
They’re called mini-exercises and they’re after the F7 lecture notes. This particular topic starts on page 217 of the F7 course notesNovember 2, 2015 at 8:59 am #280034
Thank you, I found them 🙂November 2, 2015 at 9:36 am #280044
Good, and if you’ve any problems, get back to me.November 3, 2015 at 11:26 am #280261
Thanks, I reviewed those mini exercises, indeed it helped. I just have one question In goodwill mini exercise answer nr8 Ret ears 6 months (21,000 + 2,000)/2, how did you calculated 2,000, I couldn’t understand. Page 245, F7 Notes 2015.
Thank you.November 3, 2015 at 1:50 pm #280276
From memory, it’s the loan interest that was paid – but the loan existed for only the post acquisition 6 months so, to get back to a “fair” profits (pre loan interest) we need to add back that 2,000
Then we can time apportion and find 11,500 leaving just 9,500 for the post acquisition period
OK?November 3, 2015 at 2:02 pm #280278
I do not see the loan in this example, it maybe related to adjustment to depreciation of plant after FV adjustment but I am not sure if we should include this in goodwill calculation, as I saw in other examples it would be excluded?November 3, 2015 at 2:44 pm #280288
The fair value adjustment (before any accounting for depreciation on the fair value) will be included in the goodwill calculation.
Is this the question that says “the fair values HAVE BEEN recorded in the subsidiary’s records” in which case, the extra 2,000 depreciation necessitated by the fair value adjustment is an expense related solely to the post acquisition period.
So, add it back, divide by 2, and then deduct it from the second half
OK now?November 6, 2015 at 7:52 am #280762
In chapter 1, page 9, example 3, Baiba’s 2010 profits were adjusted with an increase of $200,000 times 3 = $600,000. I understand the the Cr. entry is to Liabilities but how is the Dr. entry to Finance Charge when its not an interest but an adjustment to profits?
Thank you.November 6, 2015 at 8:05 am #280769
Where we have contingent consideration, when that contingent event is known then any adjustment to our original estimate goes through statement of profit or loss – it’s what it says in the standard!November 6, 2015 at 9:35 am #280788lufunomaMember
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Where do I find videos for IFRS 9, IFRS 2, IAS 8 IAS 40 I cannot see these videos also i would like to find out if it is sufficient to only look at open tuition notes and videos for the exams or do i perhaps have to study notes from BPP as well?November 6, 2015 at 4:06 pm #280845
If the videos exist, they are on the site already. The course that we ran and during which these lectures were recorded ran for only 5 days so something had to give. The topics mentioned were at the time thought to be easy enough for students to self study.
Of course, if you encounter any problems with your studies, post again and I’ll answer them
The course notes have never been held out as being replacement for a study text and, if you feel that you need a text, then by all means buy one. I think you’ll do very well to lift it, let alone read it! Many students do apparently find the course notes and lectures and a revision kit to be sufficient.November 10, 2015 at 12:50 pm #281476
In chapter 12 foreign currency matters, page 114, example 2 (Grainger/Malfoy), in the Statement of Changes in Owner’s Equity, you deducted 6000 dividends from NCI column. Weren’t those dividends received by NCI from Malfoy’s? Shouldn’t they be added instead of deducting them?
Thank you.November 10, 2015 at 5:07 pm #281560
No, imagine the nci balance as the amount owing to the nci. Then to pay them $6,000 will reduce the amount we owe them
OK?November 10, 2015 at 9:34 pm #281603
But then why is it that we treat 8750 (NCI’s share of after-tax profits) as an addition to NCI column? Isn’t it also owed to NCI by us? Also, why is it that 8750 is deducted from Retained Earnings column but the 6000 we owe to NCI is not deducted from Retained Earnings.November 11, 2015 at 3:45 am #281630
why is it that 8750 is deducted from Retained Earnings column but the 6000 we owe to NCI is not deducted from Retained Earnings.”
“why is it that we treat 8750 (NCI’s share of after-tax profits) as an addition to NCI column?” That’s exactly why we add it in the nci column – because it’s an amount owed to the nci in respect of this year whereas the dividend payment is settling some of that amount owed
“why is it that 8750 is deducted from Retained Earnings column” Because the nci’s share of this year’s profits is included in the total profits for the year in the retained earnings so we need to take it out of retained earnings and credit the nci column
“why …………………the 6000 we owe to NCI is not deducted from Retained Earnings” Because the dividend was not included within the profit calculation so therefore not included in the retained earnings column
Better?November 16, 2015 at 2:47 pm #282870AnnaMember
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Why in the Example 1 of Chapter 1 when caluclating the goodwil on the acqisition of Danute you did not include the failr value adjustment of inventory?
Many thanksNovember 16, 2015 at 6:39 pm #283089
I believe that I did! Is it not within the mini-calculation of the profits split?
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