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Financial Accounting
ICAEW
10
Accounting
Professional
11/28/2010

Additional Accounting Flashcards

 


 

Cards

Term


Fair value of assets, liabilities and contingent liabilities were the same as their carrying amount except for a legal claim that had been included as a con liab. At acq the FV was 500k, it was later settled for this amount.

Definition
In W2, reduce the NA @ acq by 500 as a record of the con liab.
Term
Following acq, sub sold parent goods at a mark-up of 20%. The goods cost sub 600k and 1/3 remained in inventory at y.e. (SOFP Q)
Definition
 w6, PURP to subsid of 40k. This gets deducted from w2, NA @ y.e.
Term
At y.e., parent had inter-comp R'ables balance due from sub of 5 mill and assoc 8mill. These amounts were shown in trade receivables and payables accordingly.
Definition
Reduce Consol CA by 5 mill and CL also by 5 mill. 8 mill doesn't matter
Term
Parent has undertaken annual impairment reviews of GW. At the prev y.e., an impairment loss of assoc of 5 mill was recognised. An impairment loss of 1.5 mill in respect of sub has been recognised for this y.e. SOFP
Definition

W2, deduct the impairment for this year for sub. Also in w5 RE. 

 

For Inv in assoc working deduct 5 mill for impairment to date

Term
Sub sold goods to parent costing 600k at 20% MU. 1/2 these goods remain in parents inventory. I/S
Definition
In w2, Consol schedule. Reduce subs cost of sales by 60k PURP.
Term
Parent has undertaken impairment reviews of GW. At last y.e. impairment losses of sub1 of 100 k have been recognised, this is then disposed of. At this y.e. imp losses of sub2 30 and assoc of 10 have been recognised. I/S
Definition

w2, consol schedule, deduct 30 from subsid 2. 

w4, group loss on disposal, deduct GW imp to date from GW @ acq.

Assoc impair has no effect on I/S, a SOFP quesion would use this in inv in assoc working. 

 

Term
Parent needs to recognise an impairment in its invest in associ of 50k. SOFP
Definition

w7, investment in assoc, remove 50.

 

This impacts the NCA, investments in associates.

Term
Comp arranged to sell 250 finished goods with CA of £2.20 each. Order was negotiated at £2.30. However the customer is not taking order now so they're being placed in general inventory. Normal selling price is £2.50 with 50p commission. I/S
Definition

NRV is 2.50 - 50 = 2

=> inv write-down is CA(2.2)-2*250= 50k

Deduct this 50 from RE b/f and from w2 consol schedule inventory.

Term

Definition

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