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Transaction between equity holders: Rose

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Transaction between equity holders: Rose

  • This topic has 3 replies, 2 voices, and was last updated 12 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • December 6, 2012 at 2:55 am #56207
    Anonymous
    Member
    • Topics: 17
    • Replies: 12
    • ☆

    Hi Mike,

    Graham’s method to calculate above is different to what I have been doing

    For acquiring further shares I use following format

    Cash received
    10% acquired x net assets at year end W2 
    =decrease in equity

    For disposing

    Cash received
    10% disposed x net assets at year end W2 + goodwill
    =increase in equity 
     
    Are these correct?

    Thanks help so much needed 

    December 6, 2012 at 8:49 pm #110382
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23309
    • ☆☆☆☆☆

    There may be a goodwill implication in the acquisition and there may be no goodwill implication in the disposal. Have you tried following this in the videos?

    December 6, 2012 at 8:54 pm #110383
    Anonymous
    Member
    • Topics: 17
    • Replies: 12
    • ☆

    Thanks Mike

    Not tried any videos. But will I lose marks by using any of those above?

    December 6, 2012 at 9:15 pm #110384
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23309
    • ☆☆☆☆☆

    Not if you don’t forget that there may, or may not, be a goodwill implication in either situation

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