*** P2 March 2016 Exam was.. Instant Poll and comments ***

I understand it is only necessary to time apportion if asked for a SPLOCI. SOFP was asked for so no need right ? It was a sub at the year end so just add across …. right ??!!!!

Direct 0.7 x 0.6 is 0.42
Indirect nci is 0.58
25% of the other is associate so need to include investment of associate. The share of profit is takin into account 6 months. That’s what I can remember. Think another resist is on the cards

Elitsa what did you put for 3 and 4 roughly

whether it is a step acquistion ,or just simply a complex group ,depends on the further acquistion date .if indirect acquistion date of SS is the same date as the direct acqusition , this is simply a complex group consolidation. If the date is different ,then it is a combination of step acquisition and complex group

yes it is step acquisition and not D shape

Yes you are right, step acquisition it is

It was a D-Shape group. If you can recall, both the Parent and Sub 1 (Lambley) had investments in H. A step acq involves 2 purchases from the same entity. This didnt happen in the exam question. Bideford bought 25%. And then Lambley bought 70%. Because Lambley bought 70%, it meant that H company became a Sub Sub of Bideford. But it’s not a step acq. Definitely a D-Group.

I am writing P2 for the first time in June, your comments really made me to brace myself up for what’s ahead. Hope it goes well for you all 🙂

@hassandiamond said:
It was a D-Shape group. If you can recall, both the Parent and Sub 1 (Lambley) had investments in H. A step acq involves 2 purchases from the same entity. This didnt happen in the exam question. Bideford bought 25%. And then Lambley bought 70%. Because Lambley bought 70%, it meant that H company became a Sub Sub of Bideford. But it’s not a step acq. Definitely a D-Group.

Can u clarify. D or step. Surely there was 2 purchases by L in H???

Correct me if i’m wrong because during exam stress, your mind can play tricks.This is how i read it.

2 years prior, Bideford bought 60%(SUB) in L and 25% (ASS) in H. Then 6 months from the year-end, L bought 70% in H. At that point, Bidefords 25% holding in H had increased but not by additional purchase of shares, but just cos in the 18 month gap, they would have made profits and the investment would have gone up. The additional amount which it had gone up by needed to be added in W5 group reserves because Bideford was only recording the investment at cost. As for the group structure, the acquisition of H occurred when L bought 70% in H because that meant that Bidefords total holding (direct and indirect) was now 67% (42 and 25).

67% effective holding hence Hassan is correct.

There is no step acq in SFP.

An associate consolidated when control, hence becomes sub, achieved.

Difference in reserve between acquisition and at the reporting date is reflected between NCI and group reserve.

Therefore complex group (D Shape), can not confirm enough.

@hassandiamond said:
Technically it’s not called a step-acquisition, because B didn’t purchase the shares directly. It gained control, due to L’s purchase. But i think the treatment is the same, and as long as the %’s are the same then we are probably saying the same thing! 🙂 It’s definitely a D-shape group though, because both B and L had control over H.

Hassan. Do you use the fv 25% per q in assoc at date of 70% purchase to get gooodwill??

@mfe100 said:
Hassan. Do you use the fv 25% per q in assoc at date of 70% purchase to get gooodwill??

Yup! The difference between the 2 associate figures needed to be added to Ret Earnings because Bideford was still recording it at cost.

If possible, can you guys remember what you did with the Inventory and provision? I think i worked out an inv write down of 3m and then with the provision, because it was an “onerous contract” you record a provision for the lower of the total payments in the contract or the cost to terminate. I think it was 3.5 off retained earnings and then added to Liabilities on the face of the SFP.