• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Special purpose entity

Forums › ACCA Forums › ACCA SBR Strategic Business Reporting Forums › Special purpose entity

  • This topic has 1 reply, 1 voice, and was last updated 4 years ago by tajwartasin.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • January 29, 2021 at 7:00 pm #608504
    tajwartasin
    Participant
    • Topics: 60
    • Replies: 82
    • ☆☆

    During the year ended 31 December 20X6, Guidance Co stated that it had reorganised its assets and set up a SPE.
    Guidance Co transferred property to the SPE at its carrying amount of $50 million, but had incorrectly charged revaluation reserves with this amount rather than showing the transfer as an investment in the SPE. The property was the SPE’s only asset. However, Guidance Co still managed the property, and any profit or loss relating to the assets of the entity was remitted directly to Guidance Co. Guidance Co had no intention of consolidating the SPE.

    answer was:
    By transferring their assets to a SPE, the asset turnover ratio will be significantly larger. However, the SPE should be consolidated by Guidance Co in its group financial statements and the property included in assets and the charge eliminated from revaluation reserves in its single entity financial statements. The latter will increase shareholder equity.

    sir my question is that why the share holders equity will increase? / why does it say ‘the latter will increase shareholders equity’

    February 4, 2021 at 2:41 pm #609149
    tajwartasin
    Participant
    • Topics: 60
    • Replies: 82
    • ☆☆

    sir pls answer my question, thank u.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • RashidMh on MA Chapter 1 Questions Accounting for Management
  • John Moffat on Relevant Cash Flows for DCF Relevant Costs (example 1) – ACCA Financial Management (FM)
  • John Moffat on Accounting for Management – ACCA Management Accounting (MA)
  • Hsaini on Accounting for Management – ACCA Management Accounting (MA)
  • kennedyavege@2023 on Relevant Cash Flows for DCF Relevant Costs (example 1) – ACCA Financial Management (FM)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in