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Hi All, just a quick question about elimination. Lets say The parent is selling the Sub and it's now classified as held for sales for 1000. So Parent DR asset HFS 1000 CR Investment in Sub 1000 As I understand, we still need to consolidate the sub until parent lost control, so when it's still "...

Hi All, Just quick question about consol system. In a big company with its consolidated system like SAP, is the elimination done automatically by the system so at year end, we don't need to do select with movements (investmentin Sub, dividend, etc) to eliminate? Also, once elimination entries are do...

Hi Marek, thanks for the reply. Let's say I need to close the book right now, and need to make decision on this, so based on my hypnosis, I will do below approach. Step1 I do the impairment test for sub to determine its FV and book the impairment loss in Subs. Step2 Once I done the impairment journa...

Hi All Need some help at understanding real life application on ias36 and ifrs5. Let's say the parent owns 100% of the Sub for $1100. During the year, the parent decides to sell the Sub. As I understand correctly, before the sales, parent does the impairment test for the sub and it's determined that...

Hi Team just a quick question about goodwill on consolidated cashflow. As you know goodwill arises from the group elimination (between investment in sub and sub's equity). As the result, there will be a balance of goodwill sitting in the consol. balance sheet, lets say $100. When it comes to present...

Hi Leo, thanks for the answer. Just to clarify a bit. on your reply below. What if from the step 1, the asset is on revaluation method and the value increase and hence increase goes to reserve (oci). What do we do with the reserve (oci) once the AHFS is sold, do we clear it to P&L, if so, what a...

Hi IFRS Gurus I got question in line with IFRS 5. As i understood, Before transferring the PPE to current asset and ready for sales, we need to determine the fair value first. When determining the FV. The FV is the lower of CA and FV minus cost-of-sales. Step 1....... Let's say, it is determined tha...

Hi Team Just a quick question about standard ias 16. If I opt to use revaluation model on my PPE, I wonder if it's common to use "value in use" method to determine the fair value. The "value in use" method is like the way how I assess the goodwil impairment of the asset. Regards ...

Hi All, I am trying to make sense of cashflow statement using indirect method. The main challenge is on the "adjustment for non cash item". I understand that some of the items include depreciation, revaluation gain, income tax, etc. And I can easily solve all the exam questions on paper. B...

Hi All

Just quick question, is there any specific treatment on NCI when it comes to consolidated cashflow?
Unlike consol BS, I look at the financial report for some listed Companies but it doesn't appear that the NCI is mentioned on the cashflow.

Regards
Sowrudy

Hi Leo, would below be correct then if the one who declared th3 dividend is the sub?

Sub.........
Dr retained retained earnings 100
Cr cash 100

Parent..............
Dr cash 100
Cr dividend income 100

While elimination........
Dr dividend paid (equity account) 100
Cr retained earnings 100

Hi All Just want to get some clarification on intra-group journal entry in Relation to group elimination. Overall since retained earning of the group doesn't move, but I need to reduce the "dividend income" from the group, that means I need to have another debit to balance the movement in ...

Hi Marek, in this case (on statement change of equity), as we already know the nci number at the high level, we can just minus the total number of any particular equity item movement with its corresponding nci. Just say if the total movement of Retained earnings is 10, and the total nci in BS is 4, ...

Hi Marek, I found that we don't need to work out the nci for every transaction because nci is reported at the high level. So from the group balance sheet, I guess we just need to eliminate in full any intra-group transaction, while nci is presented separately on high level based on the total of each...

Hi All I notice that when it comes to intra-group dividends (paid in cash), we only need to reverse from the p&l side not the BS. The reason because the entity that declared dividends (DR retained earnings, CR cash) and the one receiving the dividends (CR dividends income, also part of retained ...

Hi Marek, it's an job placement exam at the end of my internship with a medium size private accounting firm. They examine what I have learned during the internship to decide whether to offer real employment.

I think I figure out, it will not affect P&l because the opening balance of the retained earnings, doesn't include that (the RE at the time of acquisition) from the sub, so when it's eliminated, then it will bring back the retained earnings to "normal" position that it would be without...

Hi all IFRS Gurus, I am about to finish my study about group consol, but get stuck on this case below. When it comes to elimination for intra group transaction, quite often we adjust the retained earning. For example: - Inventory sales among the group (assuming nothing comes out to the external), I ...

Hi All, Quick question about dividend elimination. Intra group dividend elimination. Just say I Parent owns 60% of Sub1, and Sub1 owns 60% of Sub2, as per the structure below. Parent ....Sub1 60% ......Sub2 60% During the year, Sub2 pays dividend to Sub1 amounting to $1000. From the group level, thi...

Thanks All

As far as fair valued is concerned, can I actually measure the fair value of the Sub using EBITDA multiple and perpetuity growth method if I have the EBITDA number from the past 5 years?

Thanks JRSB So just say if I were working as an accountant and my boss gave me a balance sheet of the new company he just bought/acquired, but he didn't tell me the fair value, is it common for accountant to go ahead using the equity to work out the goodwill by assuming the fair value is equal to eq...

Hi Team, Sorry If I posted too many questions in a day, but exam is close and I need help My question is about determining goodwill during the group consol. As i understand, goodwill is simply the difference between the equity value of the Sub and the consideration paid. From what I found on the Int...

Hi All I am still learning about group consol and I got a couple of questions after learning about IAS 36. In determining goodwill, we determine the goodwill after we eliminate the Sub's equity at the time of acquisition. And that is done during the consol level. My question is, when we consolidate ...

Hi JRSB, some follow up questions below. On the below reply "ie based on the rate they use to borrow a similar amount of cash as the lease liability." If I already have a short term 6 month loan with my bank with rate of 3%. So to work would the IBR for my new 5 year lease, can I use that ...

Hi team, I am struggling with incremental borrowing rate atm. I have read all the materials on the internet but all of them are simply copy-paste theory without practical example on how to determine the IBR. I wonder if you have any practical example or excel working that illustrate how the ibr is c...

Hi team Have a question about lease accounting from lessors side. Just say I am a lessor and I am leasing my car to my client for 1000 a month with optionto buy the car with $1. My calculation in excel will show lease investment at the end of the contract is $1. Question: what happen if the client d...

Thanks Leo,

Is it correct for me to say the G'ownership on CC is 70% but the NCI of CC is only 35% (being 51%* 70%)?

Hi Team Now I am learning about non-controlling interest, and have a quick question. Just say I am operating a company called "grandpa corp". And grandpa owns 52% of Mommy. And Mommy owns 70% of child, while child owns 40% of grand-child; per structure below: Granpha ------> Mommy corp 51%...

Hi Team I have a question about Intra-group transactions with inventories. I understand that as a group, we needs to eliminate the sales & COGS (profit) derived from intragroup sales when doing group consol. The way we do it is to identify the QTY of that particular inventory sourced from interc...

Hi team Just quick question about Classification of asset. Just say if I run a hospitality business and own 10 hotels. The hotels are my main cash generating income. Questions: can the hotels be considered investment property because guests who stay in the hotel literally paying for accommodations &...