Equations (Pink)

Question 1

Goodwill

Answer 1

= Consideration transferred + NCI - Fair value of assets and liabilities

Question 2

Liability Element of a compound financial instrument

Answer 2

= Whole instrument - present value of principal - present value of interest

Question 3

Equity Element of a compound financial instrument

Answer 3

= Whole instrument - Liability Element

= Whole instrument - [Whole instrument - present value of principal - present value of interest]

Question 4

Amortized cost of financial assets (for SOFP)

Answer 4

= Initial cost - Principal repayment + Cumulative amortization

Principal repayment goes to SOPL

Question 5

Initial Measurement of Lease Liability

Answer 5

= (Present value of future lease payments + any expected payments at end of lease period) * Discounted interest rate

Question 6

Lease Liability when in arrears

Answer 6

At end of Yr 1 = Present value of future lease payments + Interest - Installment in arrears

Repeat for further years, subtracting non-current at the end of each year to find current liability.

Question 7

Lease Liability when payments made in advance

Answer 7

Liability at year end = present value of future lease payments + interest

Subtract installment made in advance to find liability > 1 yr

Question 8

Sale & Leaseback:

- Gain on rights transferred

Answer 8

= (Fair value - Carrying amount) - [(Fair value - Carrying amount) * (Present value of future lease payments/Fair value)]

Question 9

Sale & Leaseback:

Right of use retained

Answer 9

= Carrying amount * (Present value of future lease payments/Fair value)

Question 10

Deferred Tax

Answer 10

= - [Carrying amount - Tax base]