CIMA F2 Financial Management Quotes

“Whether control has been established; The percentage ownership; The date of acquisition.”
― Astranti, CIMA F2 Financial Management: Study Text

“A joint arrangement is an arrangement where two or more parties have joint control (over the financial and operating decisions). A joint arrangement may be classed as a joint operation or as a joint venture.”
― Astranti, CIMA F2 Financial Management: Study Text

“Equity method only - There is no longer a choice of accounting treatment (proportionate consolidation or equity method) for handling jointly controlled entities in the consolidated financial statements. Only the equity method can now be used (as described for associates in IAS 28).”
― Astranti, CIMA F2 Financial Management: Study Text

“Preference shares will almost always be classified as liabilities, rather than equity, and so preference dividends constitute part of the finance cost.”
― Astranti, CIMA F2 Financial Management: Study Text

“Thus, from a group perspective, the inventory in P Ltd is overstated by $2,000 as is the profit in S Ltd. The consolidation adjustment required is: DR Consolidated retained earnings $2,000   CR Consolidated inventory     $2,000 The adjustment will allow the consolidated statement to be correctly stated.”
― Astranti, CIMA F2 Financial Management: Study Text

“To remove the unrealised profit from inventory (and from retained earnings) the consolidated financial statement is adjusted. Consolidation adjustments for unrealised profit in inventory Calculate the unrealised profit included in inventory. Using the unrealised profit amount revise down the inventory and retained earnings in the consolidated statement of financial position.”
― Astranti, CIMA F2 Financial Management: Study Text

“The consolidated accounts present the parent and its subsidiary as a single entity. Thus, only transactions with third parties i.e. outside the group should be included and not intra-group activity. This is a requirement of IFRS 10 Business Combinations.”
― Astranti, CIMA F2 Financial Management: Study Text

“Calculate the group share of the associate’s profit after tax and add to the income statement. Increase the carry value of the investment in the associate (in SoFP) with this profit. (This represents the increase in the group share of the associate’s net assets).”
― Astranti, CIMA F2 Financial Management: Study Text

“Eliminate from the P Group income statement, the dividend received from the associate (as this will be replaced by the share of its profits after tax) and reduce the carry value of the investment in the associate in the SoFP (by the dividend amount).”
― Astranti, CIMA F2 Financial Management: Study Text

“Calculate goodwill impairment - expense it in the income statement and reduce the carry value of the investment in the associate in the statement of financial position (SoFP).”
― Astranti, CIMA F2 Financial Management: Study Text