Proforma’s

Question 1

Disposal profit or loss in consolidated statements

Answer 1

Proceeds 
FV of shares retained
Less 
CA of sub: Goodwill, NA's and NCI @ disposal 
= Profit and loss

Question 2

Cash flow Statement

Answer 2

Operating activities
Investing activities
Financing activities

Question 3

Direct method of cash flow

Answer 3

Cash receipts from customers
Cash paid to suppliers
Cash paid to employees
Other cash expenses

= cash generated from operations

Question 4

Indirect method of cash flows

Answer 4

Profit before tax
Finance costs 
Investment income
Share of profit or loss of associate 
Depreciation/amortization/impairments
Other non-cash income or expenses
Profit or loss on disposal of NCA
Increase or decrease in inventory, receivables and payables 

= cash generated from operations

Question 5

Earnings per share (EPS)

Answer 5

Earnings attributable to ordinary shares / weighted average no of ordinary shares

Question 6

W2. NA’s of Sub

Answer 6

Share capital 
Retained earnings 
Other components of equity
FV adj
Less
Post acq depreciation of FVA
Purp Adj (if S is the seller) 

These at acquisition and reporting date.

Question 7

W3. Goodwill

Answer 7

FV of consideration 
NCI @acq 
Less
FV of subs identifiable NA's (W2)
Goodwill @ acquisition 
Less
Impairment 
Goodwill @ reporting date

Question 8

NCI @ acq

Answer 8

Full goodwill method = FV and 100% so need to split out

Proportion of NA’s method = only the parents %

Question 9

W4. Non-Controlling Interest

Answer 9

NCI @ acq (W3)
NCI % x subs post acq reserves
Less
NCI % goodwill impairment (if FV)

= NCI @ reporting date

Question 10

W5. Consolidate Reserves

Answer 10

100% of P's Reserves 
P's % of post acq reserves (W2)
Less 
Goodwill impairment (W3)
Gain in bargain purchase 
Less
Purp adj (if P is seller) 

= reserves @ reporting date

Two Collins retained earnings and equity

Question 11

Accounting for an associate

Answer 11

Cost of investment
P’s % of associates post acq reserves
Less
Impairment to date

= investment in associate

Question 12

Share of profit of associate

Answer 12

P’s % of associates PAT
Less
CY impairment

= Share of profit of associate

Question 13

Goodwill for step acquisition

Answer 13

FV consideration for new shares
FV previous shares
NCI @ acq 
Less
FV NA's @ acq

= Goodwill @ acq

Question 14

Disposal in individual financial statements

Answer 14

Proceeds
Less
CA shares sold

= Profit or loss

This is taken out in the consolidated financial statements

Question 15

Cash flow investing activities

Answer 15

Dividends received from associate
Interest received 
LESS Purchase of PPE
Proceeds from sale of property
LESS Acquisition of sub (net cash acquired)

Question 16

Cash flow from financing activities

Answer 16

Issue of share capital 
Less
Repayment of loan 
Dividends to NCI
Dividends paid to parent shareholders