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Please accept our apologies for any inconvenience that the following errata may have caused.
Question 10 BN (3/12)
Solution to (a)(i)
At the bottom of (W1), Note 2 should say Annuity factor 9% after 4 years (rather than Discount factor 7% after 4
years).
Question 11 JH (5/12)
Solution to part (b)(ii)
Change Fair value at 31 December 20X4 to Fair value at 31 December 20X1.
1
Solution to part (a)(i)
1st sentence of 2nd paragraph should read:
It is initially measured at its fair value ie the cash received of $6m (rather than cash paid).
2
Solution
Replace the whole solution with the following:
ST GROUP
CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 JANUARY 20X6
$'000
Revenue (1,800 + 1,400) 3,200
Cost of sales (1,200 + 850) (2,050)
Gross profit 1,150
Operating expenses (450 + 375) (825)
Finance cost (16 + (12 6 (W2))) (22)
Share of profit of joint venture ((50 50%) 1 (W3)) 24
Profit before tax 327
Income tax expense (45 + 53) (98)
Profit for the year 229
Profit attributable to:
Owners of the parent (bal fig) 196
Non-controlling interest (110 30% (UV)) 33
229
Workings
1 Group structure
ST
70% 50% 1.2.X5
UV WX
(subsidiary) (joint venture)
3
Question 36 Preparation question: Part disposal
Question
Last paragraph of question (just before requirement):
The fair value of the non-controlling interest on 1 January 20X6 was $51,400.
4
Workings
(2) Goodwill
Kr'000 Kr'000 Rate $'000
Consideration transferred (520 9.4) 4,888 520
Non-controlling interests (3,100 20%) 620 66
Share capital 1,000 9.4
Reserves 2,100
(3,100) (330)
2,408 256
Exchange differences 20X4-20X5 18
At 31.12.X5 2,408 8.8 274
Impairment losses 20X6 (168) 8.4 (20)
Exchange differences 20X6 23
At 31.12.X6 2,240 8.1 277
5
Question 53 AH Group (FA 11/05)
Solution
In (W2), goodwill arising on acquisition should be calculated as follows:
$'000
Consideration transferred:
Shares (2m x $2) 4,000
Cash 2,000
Non-controlling interest (5,000 x 25%) 1,250
Less: Net assets at acquisition (5,000)
Goodwill 2,250
Question 57 AB (9/11)
Solution
In the operating activities section of the cash flow, the headings for decrease in trade receivables and decrease in
inventories are the wrong way round. Decrease in inventories should be 4,800 and decrease in receivables should
be 200.
In the note at the foot of the consolidated statement of cash flows, it should say dividends could also be shown under
operating activities.