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Calculations (FR) > CSFP (Practice) > Flashcards

CSFP (Practice) Flashcards

1
Q

Columns used in CSFP?

A

Parent
Subsidiary
Adjustment
Group SFP

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2
Q

After listing proforma?

A

Do adjustments (Cash in transit, PURP)

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3
Q

Common workings in CSFP

A

FV net asset value
Goodwill
NCI
Group retained earnings

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4
Q

Columns in net asset value?

A

Acquisition date
Closing date
Post-acquisition date

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5
Q

Rows in net asset value?

A

Share capital
Retained earnings
Fair value adjustments
PURP

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6
Q

Steps for the workings?

A

Asset and liabilities (PURP, cash in transit)
Goodwill
NCI
Group retained earnings
PPE carrying amount (relates to goodwill)

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7
Q

Where is share for share calculated?

A

In the shares for consideration

e.g. two for every three shares is denoted as 2/3

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8
Q

What happens with PPE carrying amount?

A

It is deducted from NCA

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9
Q

How to calculate loan notes?

A

Subsidiary shares * parent % * share price/number of shares

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10
Q

Eliminate unrealised profit?

A

Credit inventory. Reduce current assets

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11
Q

Is cash in transit a current asset?

A

Yes

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12
Q

What can consideration transferred include?

A

Shares
Loan notes

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13
Q

Deferred cash?

A

Will make a payment in the future

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14
Q

Calculate inventory from cost and fair value?

A

Fair value - cost

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15
Q

Net assets for parent or subsidiary?

A

Subsidiary

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16
Q

Is cash included in goodwill?

A

Yes

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17
Q

Impairment losses?

A

Deducted from goodwill and NCI

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18
Q

What is pro rating?

A

Process of proportionally allocating financial figures based on a specific time period

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19
Q

Steps for CSFP?

A

Proforma
Adjustments (current assets and liabilities)
Fair value adjustments
FV net assets of subsidiary
Goodwill
NCI
Retained earnings

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20
Q

Cash in transit for payables?

A

100% P + 100% S - payables amount

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21
Q

Cash in transit for receivables?

A

100% P + 100% S - cash amount - receivables amount

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22
Q

Greater than 50%?

A

Subsidiary

23
Q

Between 20% to 50%?

24
Q

What is working 1?

A

Group structures

25
Q

What is working 2?

A

FV of subsidiary’s net assets at acquisition

26
Q

What is working 3?

27
Q

What is working 4?

28
Q

What is working 5?

A

Retained earnings

29
Q

P sells $100 goods to S at $125 and S has not sold goods at end of year? (Unrealised profit)

A

P is the seller. $125-$100 = $25 (PUP)

Decrease retained earnings
Decrease inventory

30
Q

If P is seller?

A

Adjust working 5

31
Q

If S is seller?

A

Adjust working 2 at reporting date instead of adjustment date

32
Q

S sold goods P at $120000 based on markup of 20%. Half of goods remain in inventory at year end? (unrealised profit)

A

S is the seller. 120/2 = 60

60 * 20/120 = 10 (PURP)

Decrease inventory
Decrease retained earnings. PURP is deducted in W2 in reporting date section, instead of W5

33
Q

P sold an item of $250000 to S when value was $200000.

A

P is the seller. Proceeds - CV = 50 (PUP)

Decrease retained earnings
Decrease PPE.

PPE has same rules as inventory

34
Q

Fair value adjustment treatment where fair value is £50000 higher than book value and there’s 10 years of depreciation?

A

Done in working 2

FV (PPE) 50 (adjust at reporting and adjustment date) - (extra depreciation or sale of inventory) 5 (only reporting date)

Also adjust PPE: 100%P + 100%S + 50 - 5

35
Q

Fair value adjustment treatment where fair value is £100000 and is a contingent liability?

A

Done in working 2

100000 is deducted from reporting date and acquisition date.

100000 contingent liability is recorded in CL

36
Q

Start of acquisition for depreciation in fair value adjustment?

A

Put in full depreciation for fair value adjustment

37
Q

Mid year acquisition for depreciation in fair value adjustment?

A

Pro rate. e.g. 50 * (6/12)

38
Q

If acquisition took place 2 years ago for depreciation in fair value adjustment?

A

2 years worth of additional depreciation (50/10) * 2

39
Q

Examples of consideration?

A

Acquiring a controlling interest in a subsidiary
Share for share exchange
Deferred cash consideration
Contingent consideration

40
Q

Share for share exchange calculation and journal entry?

Harry acquired 80% of 10 million ordinary $1 shares of Sally offering share exchange of one for every four shares acquired. FV of Harry;s shares is $3 per share

A

of P shares issues = 8m / 4 = 2m

Number of S shares acquired = 80% * $10m = 8m

Number of shares issued = 8m / 4 = 2m

2m * $3 = $6m

Investment $6m (Not relevant)
Increase Share capital ($2m @ $1) $2m
Increase share premium $4m (Balancing)

41
Q

Deferred meaning?

A

Pay cash in the future

42
Q

Deferred consideration?

A

Parent may agree to pay cash in future following acquisition of subsidiary

43
Q

Deferred consideration calculation?

A

Cash OR number of S shares acquired * present value $ * discount rate $

44
Q

Deferred consideration liability?

A

Deferred consideration * cost of capital %

45
Q

Deferred consideration in SFP?

A

Deferred consideration + Deferred consideration liability

46
Q

Contingent consideration?

A

Recorded at fair value. Takes into account probability of payment being made

47
Q

What requires a separate working and is not adjusted in CSFP?

A

Goodwill
NCI
Retained earnings
Share premium

48
Q

Consideration transferred?

A

Always subsidiary figures

49
Q

How is depreciation for one year treated?

A

Decrease PPE
Decrease retained earnings

50
Q

How to calculate partial goodwill?

A

Fair value of consideration + (NCI * net assets at acquisition) - net assets at acquisition

51
Q

When to do markup calculation?

A

Viagem co had a markup cost of 25% on sales. Greco had $1.5million of these goods in inventory

Calculations (FR) (41 decks)

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