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For qn on prodigal june 2011, the revaluation on land is included in calculating the post acq reserves.
But why for december 2014 , Qn on Plastik, the revaluation wasn’t included when calculating the post acq reserves ?
What’s the difference between these 2 ?
In general, For URP on NCA won’t there be any adjustments made to the SOPL ? Don’t we have to + URP on NCA to the cost of sales ?
Regarding my first post. Initially i thought if there is a revaluation of the subsidiary’s land it will be included in while calculating the post acq reserves.
But i just flipped back to june 2014 exam , qn on Penketh . In this qn there is a revaluation in the subsidiary’s land but it wasn’t included when calculating the post acq reserves.
So how do we tell when to include it when calculating the post acq reserves ?
How did they derive the figure 200 for the other equity reserve under post-acquisition reserve. I dont understand .
Prodigal – Prodigal’s policy is to revalue the group’s land to market value at the end of each accounting period. Prior to its acquisition Sentinel’s land had been valued at historical cost. During the post acquisition period Sentinel’s land had increased in value over its value at the date of acquisition by $1 million. Sentinel has recognised the revaluation within its own financial statements.
Plastik – The policy of the Plastik group is to revalue all properties to fair value at each year end. On 30 September 2014, the increase in Plastik’s property has already been recorded, however, a further increase of $600,000 in the value of Subtrak’s property since its value at acquisition and 30 September 2014 has not been recorded.
Sentinel HAS recognised the revaluation whereas Subtrak HASN’T recognised the revaluation
“So how do we tell when to include it when calculating the post acq reserves ?”
READ THE QUESTION!
“In general, For URP on NCA won’t there be any adjustments made to the SOPL ? Don’t we have to + URP on NCA to the cost of sales ?”
No, the adjustment is to the NCA and to Retained Earnings
“How did they derive the figure 200 for the other equity reserve under post-acquisition reserve. I dont understand .”
Now which question are we on? Penketh, Prodigal or Plastik? You really don’t like to make my life easy, do you!
“I mean how did they get (200)”
No idea until you tell me which question
And now the killer!!!!!
It was barely 8 hours from your first post on this thread (7.32) until this last obscenity at 15.43
You do NOT push me into answering you. I have never yet failed to answer any of your questions and I don’t remember a single occasion where it took me longer than 30 hours maximum (normally I respond within 24 hours but I was rather annoyed with you yesterday for that last post so I left it until now
Sorry. I thought my question was overlooked. Very sorry.
Prodigal. How did they get the (200) for the other equity reserve under the post acquisition reserves ?
Can you see ANY question on the F7 Ask the Tutor forum that I have ever overlooked?
Do you mean this (200)?
Isn’t it 6 months’ worth of the $400 loss in the year for Sentinel as shown in the question?
“Loss on fair value of equity financial asset investment (700) (400)”
Okay for the same qn, When calculating the group retained earnings why didnt they add P% of full post acq reserve 30800 ? Instead they added the P% x 30000 only . Why?
Is this going to be another obvious answer, I ask myself!
Please just remind me where you have got $30,800 from
Post acq
– Retained earnings 33000
– other equity reserve (200)
– Revaluation upwards 1000
– URP in S 3000
Total 30800There is a note given in my answer key. It states ” only the post acquisition impact on retained earnings should go to the group retained earnings. This will be 33000 post acquisition profits less the 3000 URP. ”
I dont understand what they meant by post acq impact. Aren’t they all already in the post acquisition reserves ? Then why cant we just use the full post acq reserves instead ?
“– other equity reserve (200)
– Revaluation upwards 1000”I believe that you’ve got your brackets 100% wrong here!
Retained earnings for the year were 66,000
Time apportionment brought that down to 33,000
The pup of (3,000) is clearly a post-acquisition adjustment
The revaluation and depreciation adjustments are also post acquisition
“Unrealised profit on sale of plant (1,000)
Depreciation adjustment on sale of plant (1,000/21?2 years x 6/12) 200”these HAVE been included in post-acquisition reserves ……and shouldn’t have been
Ya. But that adjustment we have to adjust in the the Cost of sales right. I’ve already done that. I still dont get what you’re tryna say. But aren’t the other equity reserve and the revaluation upwards different from the profit and depreciation charged wrongly in the COS transaction (ii) ? Or are they related ?
Anuja
My head hurts! Every time you write it is as though you assume that we are face to face in an uninterrupted conversation
And we’re not
I have no idea what you are talking about “Ya. But that adjustment we have to adjust in the the Cost of sales right. I’ve already done that.”
Which adjustment?
Do you realise that since I last answered one of your questions I have answered 4 others on F4 Law, 20 others on F7, 5 on P1 Governance, Risk and Ethics and 4 on P7 Advanced Auditing
I cannot remember your post and the details of where we have arrived at so far
I don’t even remember which question we are considering (Penketh, Premier, Prodigal, Plastik ….)
And every time you ask a question, I’m having to search through the “Past exams” page to find the question – even though I remember asking you in a previous post to tell me in advance where you expected further matters to arise on any particular venture that you were starting on.
As I said at the start of this diatribe, my head hurts and I really, really, really do not want to try to understand exactly what your question is asking (because it’s not abundantly clear to me, even after reading it 3 times already)
(And, incidentally, I HATE computer speak! What on Earth are you achieving by writing “tryna”? Is your time so precious that you can’t afford a little bit of professionalism? In the quarter of a nano-second that you saved by writing “tryna” instead of “trying to” were you able to achieve anything meaningful in that time?)
Anuja, m skin u, pls, 2 move n from ths q where I v already invested so much tym tryna unrstan ur qs and ansring em s clearly s I cud
Let’s start another question, please
But this time, tell me the name of the question and the exam reference from whence you found it and, this time, let’s have it in proper language
“Post acq
– Retained earnings 33000
– other equity reserve (200)
– Revaluation upwards 1000
– URP in S 3000
Total 30800”Half of $66,000 is $33,000
The revaluation has been recorded wrongly as also has the depreciation, so we need to add back the 800 to retained earnings and deduct 800 from revaluation
The pup of 3,000 needs to come off because it hasn’t already been recorded
So we start with 33,000, deduct 3,000 pup and add 800 back into the retained earnings leaving us with $30,800 amended post-acquisition retained earnings
Now, please, no more on this question!
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