Group Accounting

Topics: Generally Accepted Accounting Principles, Balance sheet, Liability Pages: 2 (394 words) Published: April 17, 2011
In this article I am going to illustrate
complex group accounting by working
through a past exam question
updated to incorporate the new ideas
developing around group accounting.
So this article looks at the 35 marks of
computation required in Question 1 of
the Paper P2 exam.
As you should be aware, Graham
Holt, the P2 examiner, has written
two articles on the impact of IFRS 3
(revised 2008) on group accounting.
The first of these, published in
Student Accountant, in February 2009
explained the effect of the new IFRS
on changes in ownership and has since
been examined in some detail in the
Paper P2 exams during 2009. The
second article published in April 2009
explained the effect of the new IFRS
on complex groups. Given that both
this article and the April 2009 article
cover complex groups, you might feel
most comfortable with the subject
of complex group accounting if you
review this article in conjunction with
that one.
To give you an example of how
the subject of complex groups
might appear in an exam question
on this subject, I have taken a real
group accounting question from the
equivalent paper in December 2002
and included the issues raised by the
April 2009 article.
The original question was called Rod,
so I have called the adjusted version
Rodney. Here it is:
The following draft statements of financial position relate to Rodney, a public limited company, Del, a public limited company, and Trigger, a public limited company, as at 30 November:
the subject of complex group accounting is examined in paper p2 and students should ensure they are very familiar with the accounting treatment required.
RELEVANT to ACCA Qualification paper P2
Table 1: draft statements of financial position
Rodney D el T rigger
$m $m $m
Non-current assets
Tangible 1,230 505 256
Investment in Del 640 - -
Investment in Trigger 160 100 -
2,030 605 256
Current assets
Inventory 300 135 65
Trade receivables 240 105 49
Cash at...
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