Urgent DFS Help Needed

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:25AM in AAT student discussion
Hi everyone

Just been going through specimen paper. On Task 1.4 -consolidated BS, the answer says that the Alassmith plc controls 60% of subsidiary.

It acquired 3,600,000 £1 shares out of 6,000,000 in total. The group structure working shows 4000/6000. Why isn't is 3600/6000?

If anyone can help, i'd really appreciate it.

Thanks
Kath

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Urgent DFS Help Needed

    3600 out of 6000 is the share capital, the 4000/6000 is the share capital/share premium of the parent company. Try reading across instead of down! :wink:
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Urgent DFS Help Needed

    Thanks for your reply.

    The share capital is 3600/6000 which is 60%. But in the specimen answer they have worked it out at 4000/6000 = 60%.

    There is a note about 10% impairment of goodwill on acquisition. I was wondering if this might have something to do with it?
    Thanks
    Kath
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Urgent DFS Help Needed

    Looks like a typo. What you have done (3,600,000/6,000,000) giving you 60% is correct. It appears that 60%/40%M.I is quite common in exam questions anyway.

    The goodwill will have nothing to do with it.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Urgent DFS Help Needed

    Thanks very much for all your help!

    Was hoping that was the case.

    Good luck everyone for tomorrow.

    Thanks
    Kath

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