Scribd Logo
Upload

Welcome to Scribd!

  • 92 views

    Pointers in Answering The Practice Problems in Buscom and Conso F/S

    Uploaded by

    Will Emmanuel A Pinoy
    This document provides pointers for answering practice problems related to consolidated financial statements. It addresses topics like accounting for non-controlling interests at fair value or proportionate share, acquisition-related costs, upstream related party balances, gain on bargain purchase, and step acquisitions. The key points are recognizing non-controlling interests at the higher of fair value or proportionate share to avoid negative equity, expensing acquisition costs, and careful treatment of related party balances and gains in computing consolidated net income.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Pointers in Answering The Practice Problems in Buscom and Conso F/S

    Uploaded by

    Will Emmanuel A Pinoy
    92 views2 pages
    This document provides pointers for answering practice problems related to consolidated financial statements. It addresses topics like accounting for non-controlling interests at fair value or proportionate share, acquisition-related costs, upstream related party balances, gain on bargain purchase, and step acquisitions. The key points are recognizing non-controlling interests at the higher of fair value or proportionate share to avoid negative equity, expensing acquisition costs, and careful treatment of related party balances and gains in computing consolidated net income.

    Original Title

    23423423

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document provides pointers for answering practice problems related to consolidated financial statements. It addresses topics like accounting for non-controlling interests at fair value or proportionate share, acquisition-related costs, upstream related party balances, gain on bargain purchase, and step acquisitions. The key points are recognizing non-controlling interests at the higher of fair value or proportionate share to avoid negative equity, expensing acquisition costs, and careful treatment of related party balances and gains in computing consolidated net income.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    92 views2 pages

    Pointers in Answering The Practice Problems in Buscom and Conso F/S

    Uploaded by

    Will Emmanuel A Pinoy
    This document provides pointers for answering practice problems related to consolidated financial statements. It addresses topics like accounting for non-controlling interests at fair value or proportionate share, acquisition-related costs, upstream related party balances, gain on bargain purchase, and step acquisitions. The key points are recognizing non-controlling interests at the higher of fair value or proportionate share to avoid negative equity, expensing acquisition costs, and careful treatment of related party balances and gains in computing consolidated net income.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 2

    Pointers in Answering the Practice Problems in BusCom and Conso F/S

    Problem 1.

     If NCI is recognized at FV, (stated or if silent) you NEED to check ….the NCI at FV must
    not be lower than the proportionate or relevant share. Otherwise use the
    proportionate share.
     If NCI is recognized at the proportionate share, (stated) then even if there is a FV given
    which is higher in amount…. USE the proportionate share.

    The logic behind is to avoid a negative GW share for the NCI.

     NCI measured at FV – FULL GW (attributable to Controlling and Non-Controlling)


     NCI measured at proportionate share –PARTIAL GW (attributtable to Controlling only)
     Gain on Bargain Purchase will always be attributable to Controlling.

     NCINIS is part of NCINAS.


     NCINAS is part of Consolidated SHE separate from the Parent’s Ordinary shares, Share
    premium and CRE.

    Problem 2.

     Acquisition related costs (direct and indirect) are expense as incurred. On the date of
    acquisition, since the only FS available is the Statement of Financial Position, it will be a
    deduction from RE to balance the equation A=L+SHE.

    Problem 3.

     If the given is “Income from separate/own operation of Parent”, then you should not
    deduct the dividend received from the acquired company in computing for CNI since it is
    not yet included in the said line item.

    Problem 4.

     RPBI is added in computing for the CNI or NCINIS (if upstreams) since it involves ONLY
    the NI of the current year in the computation.
     BUT there is no need to add RPBI(upstream) in computing for NCINAS of subsequent
    year, since RPBI pertains to a profit realized per books in year 1 but realized for conso
    purposes in year2.
     THEREFORE, NCINAS as of year 2 will include the NI of Subs in years 1 and 2. RPBI was
    part of NI in year one so adding it in the formula of NCINAS will have a double effect.
    Problem 5.

     Gain on Bargain Purchase is recognized as income immediately. It is included in the


    computation of CNI in year one only.
     That CNI – Controlling will be part of CRE.

    (Problem 6 and 7) HOBR Problems

    Problem 8.

     Be careful if the item is “dividends declared to parent” then it is already a controlling


    interest.
     Allocated excess may include the excess of FV over BV in identifiable NA of the acquired
    co. (assuming undervalued) and any remaining excess ---GW.

    Problem 9.

     CNI- Controlling/Attributable to Parent will enter CRE.


     CNI – Total has two components the CNI – Controlling and NCINIS.

    Problem 10.

     Step Acquisition requires to recognize the fair value of the previously held securities.
     The fair value is either given or assumed based on the price paid.

    You might also like