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Thanks to all who have replied to my query about Q1. I am unwell and could not go for the paper. Looks like a majority thought it was hard. All the best for anyone who attended it.
nas was as they supplied, no need to adjust , the cost of the GW was the Fv of the 30% + cost of 40% + FV NCI less NAs at acquisation … I think
what did people get for the Investments of the group ? did you take the FV or the cost proce from the Investment figures in the BS
I think I got like 90 for the goodwill of the first sub as the 40 impairment of property was not included in the fair value of net assets and therefore would of reduced the Less@ FV of net assets part. (otherwise i would have got 50)
Does this sound correct?
@lunip said:
I think I got like 90 for the goodwill of the first sub as the 40 impairment of property was not included in the fair value of net assets and therefore would of reduced the Less@ FV of net assets part. (otherwise i would have got 50)Does this sound correct?
You needed to include the 40 impairment as part of the GW calculation.
I had 50 as well Tarek, but I did have the negative $10m as well and changed it at the last minute, not sure which is right I think it may be the ($10m)!!!!
yeah thats what I mean
@hamsterham said:
You needed to include the 40 impairment as part of the GW calculation.Yeah thats what I mean, thats why I reduced the fair value of net assets by 40..?
thought you only deduct / add the FV ADJ from nas if you are looking at an impairment of goodwill against a recoverable amount
who else got negative two for Hulty being the fv adjustment of the franchise for 2yrs?
i got the 50 goodwill but i know i did something wrong with the NA.
Q2 the cash flow edge is effective it is within 80%-125% i stated as much but i didnt do the calculation i know that it was not effective but didnt do the calculation.
I made the common mistake of spending too much time on Q1 so had to run through the other 2.
GW that i believe that i could do with my eyes closed stumped me with the reval loss and increase in non depre land.plus i didnt do the OCE adjustments- shoudnt reval gain or loss be taken to oce?
the easiest marks i believe were the JV and the impairment but in the end i didnt know for sure if the ahs should be shown as fv-cts or nvb.
FEB 8, 2015 will let me know how well i did i just hope for the best.
Part b really tough….q2 was doable…q3 i did….but not very well….consolidation goodwill 50 and Negative goodwill 10 taken to gain reserves….ethics was nice….Also got fair value gain from associate to sub….think it was 5 or 10 milion…head wrecking exam hated the essay layout of q3 / q4..
I was absent plz’advice me as my senior how I prepare p2 exam for June attempt….. Plz share your experience
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Any one know . about unrecognised contigent liability which was 6 and then revised 5 at 30 /11/2014 and meeting the criteria for provision ?
@latoyah84 said:
Q2 the cash flow edge is effective it is within 80%-125% i stated as much but i didnt do the calculation i know that it was not effective but didnt do the calculation.I thought it was more than the 125% effective but went with it being effective. FV of bond dropped approx 90 and swap increased approx 200.
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I took contigent liability from fv of assets and recognised at 5 in non current liabilities
For the 2nd entity I got -10 as the goodwill figure, but I then adjusted to remove the 20 for the royalty rights. It didn’t seem right to me to recognise the 20 royalty rights because they were from the parent but I may well be wrong here so I reduced the net assets by 20 giving a positive goodwill of 10. The other bit that indicated positive goodwill to me is that the question stated that the goodwill is not impaired (this would of course be irrelevant if the goodwill was negative), I know this isn’t absolute proof of positive goodwill but it nudged me in that direction.
For the first company I got a goodwill on acquisition of 50, but then adjusted for true-ups within the 12 months (the 40 land, and the 1 provision). I’ve just realised I did these the wrong way round and got goodwill of 11 (50 – 40 +1) where it should have been 89 (50 + 40 – 1). Oops! Hopefully some method marks though.
What did others get for the gain on deemed disposal? I was happy with mine at the time but I’m not so sure now!
AJ
Re Q1 I could not balance the SOFP for $20… I think I got $8,897m something if I remember correctly.
It was negative goodwill for sure (bargain purchase) – there was also a clue in the question in that they did not do a lot of marketing for the sale and they needed the cash from the sale…….
I forgot to put it in the SOFP though, although I made a note that it is charged to the SOPL.
But the other Goodwill I got $84m….. I think.
Could not remember the detail of the UK FRSs (I just mentioned FRS102)
And the question on Ethics was reasonable, ethical principles mainly focusing on professional behaviour and integrity. And for the chief accountant to take professional advice on the matter as it would jeopardise his profession by issuing inaccurate reports as was requested by the directors to desparately obtain the loan/financing from the bank………
Q2 and Q4 were a bit hard and I waffled on a bit but not sure if I answered correctly???
Q2 I could not quite answer the calculations though. I talked about Hedge Accounting what it is all about.
Q2 I talked as well about the “Related Party” interests and disclosures on the government company; arms’ length transactions and so on.
I could not remember the others though.
Q4 was all on impairments of assets IAS 36 and calculations of CGUs, but here I am not sure I answered correctly. On the CGU I thought there were some issues about Cash Flows as well…….Regarding Question 1. (a)
It is right to value the property held for sale at lower of carrying value and fair value less cost to sell.
But is it correct to value the asset at the fair value less cost to sell because the entity uses the revaluation model? I got that idea since it is said in the question that the property had a (revalued amount) of $14 m.Regarding goodwill of Margy, I don’t remember the figure, but the fair value of net assets of Margy should be decreased by revaluation decrease by the valuer in April, 2014 by $40m.
Q1 b,IFRS 2 share options to employees of subsidiaries.. What is the accountign treatment for group, stand alone & subsidiaries?
my answer was:
for group :DR expense , CR Other
for stand alone parent , as options to third parties not under ifrs 2
subsidiaries as financial asset ..
but am sure its wrong 😛For the hedge accounting the figures were:
Bond liability 2,000 and then £1,910
Swap payable 0 and then £203I found that the hedge was not effective, only just!
The movement in the total liability was (-90 + 203) = 113
The movement on the bond liability was 2,000 – 1,910 = 90
Hedge effectiveness = 113/90 = 125.6%
Therefore the full 113 (Dr 203, Cr 90) goes through the P&L
Thoughts?
My goodwill was for M around 91 and For H negative 10. SOFP didn’t balance but the total was something like 8800, For part b-SBP payments would effect joey and group and no effect on sub- part c-Accounting treatments were dubious. And said that related party interest should be disclosed as they were material.
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Any remb part d of q2 50m and 5 creditworthiness ?
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