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Revision - Calculations

ACCA SBR

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45 views4 pages

Revision - Calculations

ACCA SBR

Uploaded by

KLou1980
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Calculations

Share Option Schemes (Ch 13):

To calculate a deferred tax asset:

$m $m
Carrying amount of share-based payment Nil
Tax base of share-based payment (expected future tax X
relief)
Temporary difference X
Deferred tax asset (Temporary difference × tax rate %) X
Calculations

Consolidated SFP (Ch 18):

Group Statement of financial position as at reporting date

$m Calculation:
Non-current Assets:
Goodwill (W3) X
PPE (P + S + FV Uplift (W2) - Depn (W2) X
Investment in associate (W6) X
Current Assets (100% P + 100% S) X
Total assets X

Share capital (100% P only) X


Retained earnings (W5) X
Other components of equity (W5) X
NCI (W4) X

Total equity X
Current Liabilities (100% P + 100% S – PURP(W7)) X
Total equity and liabilities X

Workings:

(W1) – Group Structure:

P’s %
NCI %
Date of acquisition*:

*Where the acquisition is not at year end, need to pro-rata P’s share:
= X * Months / 12

To work out the %, use the number or value of shares purchased, over total
number of shares / value

(W2) – Net Assets of each subsidiary


Calculations

- Figures taken directly from SoFP or information given in question

Acquisitio Reporti Moveme Moveme To find:


n ng nt nt
Date SPL OCI
$m $m $m $m
Share capital X X - - In Q
Retained earnings X X X - In Q (p1)
Other components of equity X X - X (Revals in
info)
Fair value adjustments (FVA) X X X X PPE Calc*1
Post-acquisition depreciation of - (X) X - PPE Calc*2
FVA
PURP adjustment (if S is seller) - (X) X - Purp Calc*3
Deferred Tax (X) (X) X DT Calc *4
X X X X
(W3) (W5i) (W5ii)

Calculations:

*1&2 PPE Calculation:

- FV Uplift, either given as excess of Fair Value or calculated from


information given
- Dep’n – calculate as normal for 1 year

*3 PURP Calculation

Need to adjust depending on who has the profit:


1. Calculate the profit on the sale
(Margin – 1 word – Revenue is 100% / Mark-Up – 2 words – COS is
100%)
2. Calculate the profit in group inventory at reporting date
= Profit x amount sold
3. DR COS / CR Inventory

*4 Deferred Tax Calculation

1. Occurs with temp differences due to tax laws


2. Take the FV difference and x tax %
Calculations

(W3) Goodwill:

- What is paid to Subsidiary over and above Net Asset Value


- Not just cash
- Measured at FV or proportionate share of net assets at acquisition (PNA)

$m Calculation:
Fair value of consideration X What was paid (not just
cash)*1
Fair value of NCI X Either FV or PNA *2
Fair value of acquisition net assets (W2) (X) W2 acq. column total
Goodwill at acquisition X (Total above)
Impairment (X) See calc *3
Goodwill at reporting date X

*1 What was paid:

Need to add together all components listed:

- Cash – usually given or calculate as number of shares x share price

- Deferred cash: NPV of cash value: (Amount x (1/1.(discount rate^ years)

- Consideration (i.e. if based on profits etc) – FV

- Own Shares (now or deferred) = FV x No shares

- Share based payment schemes: FV of the current award at acquisition


date

- NB: Transaction costs expensed to the P&L

*2 Fair Value of NCI:

- FV = market value, usually given, to calculate:


- = No NCI Shares x Share Price at Ps acquisition date
- PNA = NCI’s proportion at P’s acquisition date :
- = Subs net assets at acq (W2) x NCI %

*3 Impairment:

- Reviewed annually, need to know how NCI was measured at acq:


- FV = impairment is fully Parent
- PNA = gross up to include NCI share before review

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