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Question 1

what is full GW and partial GW under IFRS?

Answer 1

full GW = FV sub - FV sub’s NA

partial GW = acq cost - FV sub’s NA acq’d (%own*FVsubNA)

partial GW NCI = FV sub NA * NCI%

Question 2

what happens when acq price is less than FV of sub’s NA (under equity method)

Answer 2

a gain is reported,

*if under acq. method: after adjusting BS, including ID IA’s to FV

Question 3

how is NCI reported?

Answer 3

NCI = NCI% * FV sub

*add NCI% for NI and div’s too

Question 4

how is GW calc’d using acq. method?

Answer 4

GW is excess of:

FV sub - FV NA - adj. to BS - recog’d IA = GW

Question 5

under IFRS, how are noncompete agreements and customer-related IA’s reported?

Answer 5

they are included in GW, not ID’d IA’s

… private co’s can elect to amortize over 10Y max

Question 6

how do you calculate for an adj. from equity method to NCI?

Answer 6

find EB investment account first, then subtract from new CV of (FV sub *OG%) = adj

Question 7

when a 70% owned sub declares and pays a cash div, what is the effect on RE and NCI?

Answer 7

no effect on RE, but NCI will decrease b/c the 30% unowned div is paid to NCI shareholders

Question 8

what is another way to calculate gain in acq method?

Answer 8

Bargain purchase:

acq cost - BV NA = discount (gain) + adj BV FA to FV = total gain

Question 9

how is contingent consideration reported in elimination entry?

Answer 9

it is added to the investment account

Question 10

how are remeas. of foreign currency reported on FS’s?

Answer 10

income from cont. op’s with separate disclosure (face or notes)

Question 11

can cumulative foreign exchange translation loss be reported as contra equity?

Answer 11

yes (OCI decrease)

*premium/disc’s are contra accounts to bond L’s

Question 12

how is income from a loan calculated?

Answer 12

it is the accrued I/R:

% rate * CV * (date?)

Question 13

what are some simple BS I/C BS eliminations?

Answer 13

Dr: A/P xx
Cr: A/R xx

Dr: B/P (I/C portion) xx
Cr: bond invest (affiliate) xx

Dr: accrued bond I/P xx
Cr: accrued bond I/R xx

Dr: D/P (affiliate portion) xx
Cr: D/R (from affiliate) xx

Question 14

simple I/S eliminations for I/C?

Answer 14

eliminate int exp/int inc (bonds), gain on sale/DE (I/C FA sales), sales/COGS (I/C inv trans)

• inv SOLD to outsiders –> correct COGS
• inv still ON HAND –> correct EI

Question 15

what is the eliminating JE for bond premium/disc’s?

Answer 15

premium:
      B/P   xx
premium xx
    invest in sub  xx
 gain on exting.   xx

disc:
                 B/P  xx
loss on exting. xx
        invest in sub   xx
               discount   xx

Question 16

JE for elimination of I/C gain on sale of land? (write up land)

Answer 16

I/C gain on land xx

land xx

Question 17

what is WP elim JE for FA’s?

Answer 17

eliminate gain and restore FA and AD to OG amt’s:

I/.C gain on sale xx
FA xx
AD xx

• elim for excess dep:
  AD xx (GAAP - non)
  DE xx

Question 18

how are div’s paid by subs recorded?

Answer 18

they are eliminated for the % owned portion, but the NCI portion is paid to NCI shareholders and decrease their NCI under equity method

*total div’s in consol’d FS’s from subs is the NCI% to external SH’s only

Question 19

how do you calculate I/C sales?

Answer 19

P+S rev’s - consol’d rev = I/C sales

• same with I/C A/P and A/R
• same w/ I/C profit

Question 20

how do you calc. consol’d CA’s?

Answer 20

CA - (I/C profit on inv * % inv on hand)

Question 21

how do you calc. inv still on hand in consol?

Answer 21

1st calc I/C revenue
2nd find COGS% (COGS/sales)
3rd: I/C sales *%COGS = CV purch’d
4th: CV purch’d * % on hand = CV on hand on consol’d BS