Relevant to P2

Sir , I wish to ask regarding:



1. In a mixed group. All the while, I realise the that both of the parent (let say, A) and the subsidiary (let say, B) acquire another company C and achieve effective controlling interest at the same date, let say 1.1.2010 or either the example given in your revision under mixed group 2.


What if, A acquire C first at 1.1.2009 for 60% and achieve control. Later year, 1.1.2010, B acquire C another 20%. Then, how are we supposed to calculate the goodwill and also NCI??


2. Another question regarding employee benefits. As for, past service cost, it is the vested portion that will be included into income stmt while the non-vested will be calculated using straight-line method over the vesting period. Let say, an amount of 90 is vested, while 270 will be for next 3 years. So, total amount vested will be 90 + (270/3) = 180 right? Then, in my calculation of PV of obligation at beginning yr to year end to find the amount of acturial gain/loss, what is the amount of my past service cost taken into this calculation? and how about when i calculating the net liability at year end? so far, If i am not mistaken, exam kit only having question where past service cost is vested immediately. so, the same amount will appear at the income stmt and also in calculation in arriving acturial gain/loss.




I am sorry, Sir to trouble you at this time. But, I really hope to receive your reply.


Thank you so much.




Answer:

Then this would be a combination of mixed and piecemeal which won't be possibly asked in the exam because of time constraint. If the examiner ask on the two areas, they would be separate entity questions.In fact in one of the past year question, the past service cost would be expensed to SOCI and the related interest on PV obligation also expensed to SOCI, thus, resulting in the calculated PV of vested past service cost reflected at the Y/E carrying amount. As for the amortised past service costs, the amount has already been reflected at the Y/E figure. From thereon, any difference between the expected PV obligation (inclusive of Past Service Costs) and the Fair Value of PV obligation will result in actuarial gains or losses.