Random qs

Question 1

How do you work out goodwill?

Answer 1

Value of investment + value of non-controlled interest = value of the company

Value of company - net assets (which is the same as equity) = goodwill

Question 2

What do you do when working out the equity in a consolidation SOFP?

Answer 2

Only include the parent company’s share capital and share premium values

Question 3

How do you work out retained earnings in a consolidated SOFP where there is a parent, a sub and an associate

Answer 3

Parent include 100% retained earnings and sub and associate only include the post acquisition % of retained earnings

Question 4

How much should you recognise a right of use asset for?

Answer 4

Carrying amount x present value of future lease payments / fair value of asset

Question 5

Should you recognise selling costs when calculating the net realisable value for inventory ?

Answer 5

Yes!