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CAP 2 Financial Reporting - calculating goodwill

  • 18-04-2010 8:37am
    #1
    Closed Accounts Posts: 18


    Hi,

    I'm repeating Financial Reporting in the summer. I live abroad and I'm not in a training contract in Ireland so I can't attend the lectures so I have one important question about FR as I can't get the answer from the syllabus.

    For Goodwill, are students now expected to use ther new method for calculating goodwill (i.e. Full goodwill method which calculates the minority interest's share of Minority Interest / Non-Controlling Interest).

    Last year we were told to use the old method (i.e. proportion of net assests, just the parent's share of goodwill).

    Also, is the Balance Sheet now called the statement of financial position etc?

    Would really appreciate it. Thanks


Comments

  • Closed Accounts Posts: 1,644 ✭✭✭theg81der


    Haven`t covered your question about goodwill, in 2nd year so haven`t gone that deep into goodwill.

    Yes the Balance Sheet is now called the Statement of Financial Position.
    The Profit and Loss is now called the Statement of Comprehensive Income.
    Stocks are inventory.
    Debtors are receivables.
    Creditors are Payable.
    Think theres been a load of changes under the new ifas`s maybe you should check becuase you`ll be expected to apply them.


  • Closed Accounts Posts: 18 John Cincinnati


    Cool, good to know that I should put down CIS and SFP.

    Anyone know about the goodwill? It's easy to do, I just need to know what to expect.

    Also, is it possible to get the mock paper from anywhere? I can't see it on the student centre etc.


  • Registered Users, Registered Users 2 Posts: 24,565 ✭✭✭✭Cookie_Monster


    theg81der wrote: »
    Haven`t covered your question about goodwill, in 2nd year so haven`t gone that deep into goodwill.

    Yes the Balance Sheet is now called the Statement of Financial Position.
    The Profit and Loss is now called the Statement of Comprehensive Income.
    Stocks are inventory.
    Debtors are receivables.
    Creditors are Payable.
    Think theres been a load of changes under the new ifas`s maybe you should check becuase you`ll be expected to apply them.

    Irish and UK is still the old terms, while international is the newer one so depends whether your doing Irish GAAP or international under IAS/IFRS


  • Registered Users, Registered Users 2 Posts: 767 ✭✭✭Odats


    For the Goodwill calculation they will have to give you the FV of the share of Non Controlling Interest at date of acquisition in order to calculate Goodwill under full goodwill method or they will say in the question it is company policy to account for NCI using the proportionate share of net assets (old method).

    Also:
    • Acquisition related costs (i.e. professional fees) are not included in the consideration transferred to obtain control but expensed to the S.O.C.I. but need to be disclosed by way of note under IFRS3 revised.
    • Contingent consideration and liabilities are included and discounted using present value e.g. additional money based on performance €400,000
    • Contingent assets are not included.
    • Watch out for measurement period adjustments to the goodwill calculation see IFRS3 revised.
    This is what I am studying for calculating goodwill for the old FAE repeat in May so if anyone is studying CAP2 and is different please feel free to correct me on syllabus issues.

    For question practice get ACCA P2 and F7 papers from December 2008 onwards as these have the revised iFRS3 examinable so new goodwill calculation and try get your hands on the BPP or Kaplan textbooks around €25 2nd hand on Amazon from December 2008 exam onwards for the same 2 papers. Will have additional practice questions.


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