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ACCA SBR MOCK
SBR (INT & UK)
Strategic Business
Reporting
A
September 2021
AZ
R
B
YA
Time allowed 3 hours 15 minutes
AY
:T
The paper is divided into two sections
BY
SECTION A: BOTH questions are compulsory and MUST be
attempted
SECTION B: BOTH questions are compulsory and MUST be
attempted
By:Tayyab Raza
, MO CK A QUES TIONS
SECTION A
BOTH questions are compulsory and MUST be attempted
1 Background
Beth, a listed company, has a reporting date of 30 November 20X7. Beth has investments in
many subsidiaries. All group companies prepare financial statements in accordance with
International Financial Reporting Standards.
Acquisition of Lose
On 1 December 20X5, Beth purchased 21% of Lose’s 100 million $1 ordinary shares for $40
million. This gave Beth significant influence over Lose. On this date, Lose had retained
earnings of $80 million and no other components of equity. The investment in Lose was
correctly accounted for in the consolidated statements for the year ended 30 November
20X6.
On 1 December 20X6 - when Lose had retained earnings of $150 million and no other
components of equity- Beth acquired control over Lose through the purchase of a further
A
59% of its ordinary shares. Cash consideration of $160 million transferred in respect of the
AZ
59% holding was correctly included in the goodwill calculation.
Purchase consideration transferred on 1 December 20X6 also included 3 million of Beth’s
R
own $1 ordinary shares. These had a fair value of $1.50 each. No accounting entries have
been posted in respect of these.
B
The carrying amount of the 21% holding in Lose’s ordinary shares as at 1 December 20X6
YA
was derecognised and included in the goodwill calculation at this amount. The fair value of
the 21% holding at 1 December 20X6 was $70 million.
AY
When calculating goodwill the director used the carrying amount of Lose’s net assets from
its individual financial statements at the acquisition date. The fair value of the identifiable
:T
net assets of Lose on 1 December 20X6 was $265 million. The excess of the fair value over
the carrying amount of the net assets was due to specialised machinery with a remaining
BY
useful life of ten years. The fair value of the non-controlling interest in Lose on 1 December
20X6 was $60 million and this was correctly included in the goodwill calculation.
Purchase of additional share capital in Lose
On 30 November 20X7, Beth purchased an additional 5% of the ordinary shares of Lose.
Consideration transferred for these additional shares was $15 million cash, which was
expensed to the consolidated statement of profit or loss. On 30 November 20X7, Lose had
retained earnings of $180 million and no other components of equity.
Jam
Beth acquired all of the equity shares in Jam on 1 December 20X5 for a consideration of
$1,250 million. The total carrying amount of the identifiable net assets at acquisition was
$1,230 million, and this was the same as the fair value. At 30 November 20X7, Beth was in
the process of selling its entire shareholding in Jam and so it was decided that Jam should
be treated as a disposal group held for sale in accordance with IFRS 5 Non-current Assets
Held for Sale and Discontinued Operations at that date. The carrying amounts of Jam’s net
assets before classification as held for sale at 30 November 20X7 in the individual financial
statements are as follows:
2
ACCA SBR MOCK
SBR (INT & UK)
Strategic Business
Reporting
A
September 2021
AZ
R
B
YA
Time allowed 3 hours 15 minutes
AY
:T
The paper is divided into two sections
BY
SECTION A: BOTH questions are compulsory and MUST be
attempted
SECTION B: BOTH questions are compulsory and MUST be
attempted
By:Tayyab Raza
, MO CK A QUES TIONS
SECTION A
BOTH questions are compulsory and MUST be attempted
1 Background
Beth, a listed company, has a reporting date of 30 November 20X7. Beth has investments in
many subsidiaries. All group companies prepare financial statements in accordance with
International Financial Reporting Standards.
Acquisition of Lose
On 1 December 20X5, Beth purchased 21% of Lose’s 100 million $1 ordinary shares for $40
million. This gave Beth significant influence over Lose. On this date, Lose had retained
earnings of $80 million and no other components of equity. The investment in Lose was
correctly accounted for in the consolidated statements for the year ended 30 November
20X6.
On 1 December 20X6 - when Lose had retained earnings of $150 million and no other
components of equity- Beth acquired control over Lose through the purchase of a further
A
59% of its ordinary shares. Cash consideration of $160 million transferred in respect of the
AZ
59% holding was correctly included in the goodwill calculation.
Purchase consideration transferred on 1 December 20X6 also included 3 million of Beth’s
R
own $1 ordinary shares. These had a fair value of $1.50 each. No accounting entries have
been posted in respect of these.
B
The carrying amount of the 21% holding in Lose’s ordinary shares as at 1 December 20X6
YA
was derecognised and included in the goodwill calculation at this amount. The fair value of
the 21% holding at 1 December 20X6 was $70 million.
AY
When calculating goodwill the director used the carrying amount of Lose’s net assets from
its individual financial statements at the acquisition date. The fair value of the identifiable
:T
net assets of Lose on 1 December 20X6 was $265 million. The excess of the fair value over
the carrying amount of the net assets was due to specialised machinery with a remaining
BY
useful life of ten years. The fair value of the non-controlling interest in Lose on 1 December
20X6 was $60 million and this was correctly included in the goodwill calculation.
Purchase of additional share capital in Lose
On 30 November 20X7, Beth purchased an additional 5% of the ordinary shares of Lose.
Consideration transferred for these additional shares was $15 million cash, which was
expensed to the consolidated statement of profit or loss. On 30 November 20X7, Lose had
retained earnings of $180 million and no other components of equity.
Jam
Beth acquired all of the equity shares in Jam on 1 December 20X5 for a consideration of
$1,250 million. The total carrying amount of the identifiable net assets at acquisition was
$1,230 million, and this was the same as the fair value. At 30 November 20X7, Beth was in
the process of selling its entire shareholding in Jam and so it was decided that Jam should
be treated as a disposal group held for sale in accordance with IFRS 5 Non-current Assets
Held for Sale and Discontinued Operations at that date. The carrying amounts of Jam’s net
assets before classification as held for sale at 30 November 20X7 in the individual financial
statements are as follows:
2
