Calculations

Question 1

What is working 1 in a group structure question?

Answer 1

Identifying the group structure. how much the parent owns of its subsidaries.

Question 2

What is working 2 in a group structure question?

Answer 2

Net assets of each subsidary.
Layout out is two colums : At Acquision date and At reporting date.
then the rows are as follows:
(Add) Equity share capital.
(Add) Other componants of equity
(Add) Retained earnings
(Add/Less) Fair value adjustment
(Add/Less) Post acquision accounting adjustments (Only for reporting colum)
Note: The total figure of the acquistion date colum is used in W3

Question 3

What is working 3 in a group structure question?

Answer 3

Goodwill
Fait value of consideration
(Add) NCI at Acquisition
(Less) Fair value of net assets (W2)
(Equals) Goodwill at acquisition
(Less) Impairment to date
(Equals) Goodwill at reporting date.

Question 4

What is working 4 in a group structure question?

Answer 4

Non-controlling interest
NCI at Acquistion (W3)
(Add) NCI % Post acquistion reserves (W2)
(Less) NCI % of goodwill impairment (W3) (Fair value method only)
(Equals) Non controlling interest at reporting date.

Question 5

What is working 5 in a group structure question?

Answer 5

Group reserves retained earnings.
Parent company (100%)
Subsidary: Group share of post acquisition retained earnings (W2)
(Less) Goodwill Impairment (W3)
(Less) PURP if P is the seller

*P% only if FV method used.

Question 6

What transactions need to be eliminated on consoldiation?

Answer 6

Any intercompany income or expenses or unrealised profit.
Dividends received from the subsidary

Question 7

How to calculate the associate using the equity method on the statement of financial position

Answer 7

Cost
(Add) Share of increase in net assets
(Less) Impairment losses
(Equals) Investment in associate
Note: Add this to the investing section of the P&L

Question 8

How to calculate a step acquisition?

Answer 8

(1) Re-measure the previously held equity interest to fair value
(2) Recognise any resulting gain or loss in Investing section of P&L
(3) Calculate goodwill and NCI

Question 9

What is the calculation proforma for calculating goodwill in a step acquistion?

Answer 9

Fair Value of previously held interest
(Add) Fair value of consideration for additional interest
(Add) NCI at Acquistion
(Less) Fair value of net asset
(Equals) Goodwill at Acquistion

Question 10

What are the steps to account for a sale of a subsidary where control is lost.

Answer 10

Consoldiate Income and expenses up until the disposal date.
On disposal, de-recognise its assets and liabilities, goodwill and NCI.
Calculate a profit or loss on disposal and present on operating section on P&L
Recognise any remianing investment in the former subsidary

Question 11

How to calculate a profit or loss on disposal of a subsidary

Answer 11

Disposal Proceeds
(Add) Fair value of retained interest
(Less) Total Net assets of subsidary at disposal date
(Less) Goodwill at disposal date
(Add) Carrying amount of NCI at disposal date
(Equals) Profit or loss on disposal

Question 12

How to account for a control to control step adjustment?

Answer 12

If the control is increased
DR Non controlling interest (Percentage lost)
CR Cash
DR/CR Other component of equity (Balancing figure)

Question 13

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