ribby hall and zian

@muneebnawaz90 said:
hello tutor
i want to ask u a question about foreign subsidiary consolidation
My teacher told us to use acqusition rate for reserves when we translate the B/S in order to get post reserves . is this ok ?
then he said no need to take ex gain or loss on Cost of investment in acquiring subsidiary …… he just said calculate goodwill in foerign subsidiary currency and then translate it on acqusition and closing rate to get the Ex gain or Loss on goodwill which will go to the Consolidated reserve.
i asked my teacher that in Exam kit in all question closing rate is used for reserves when calculating post reserves , he said that was an old method. is this true tutor?
and kindly tell me the accounting for ex gain or loss on goodwill if full goodwill method used.

In RIBBY HALL AND ZIAN
i just dont know what the $11m transfer from non current liabilities to current liabilities ?? can u tell me what is this $ 11 m all about ??

waiting for ur reply 🙁

In the question note 4 said “Ribby has a Long term loan of $10m which is owned to a third party bank. At 31st May 2008, Ribby decided that it would repay the loan early on 1 July 2008 and formally agreed this repayment with the bank prior to the year end. This agreement sets out that there will be early repayment penalty of $1m.”
Due to the fact that the Long term debt was paid Early, it should now be presented in the SOFP as a Current Liability as it would show a fairer representation. That’s my understanding.