21T3 IPASS教育 ACCT5942
期末冲刺课讲义
主讲人：韩小思
目录
Part 1 Joint Arrangement........................................................................................................................3
1. Accounting rule ...............................................................................................................................3
(1) Accounting by the joint operation itself ....................................................................................3
(2) Accounting by a joint operator..................................................................................................3
2. 具体会计记录.................................................................................................................................3
Step 1: Contributions of assets to a joint operation and asset records..........................................3
Step 2: Depreciation Adjustment....................................................................................................6
Step 3: Management fees paid to a joint operator ........................................................................7
Part 2 Associate and Joint Ventures .....................................................................................................10
1. Identification of investment..........................................................................................................10
2. 关于 Associates和 Joint Venture 判定 ........................................................................................10
3. 会计处理原则（single-line method）........................................................................................12
4.重点例题 1 (不考虑 inter-entity transaction)..............................................................................13
5. 重点例题 2 （考虑 inter-entity transaction ） ...........................................................................15
6. 综合例题.......................................................................................................................................17
Part 3 NCI and INCI................................................................................................................................21
第 1部分：基础概念 ......................................................................................................................21
1. Direct and indirect non-controlling interest structure .............................................................21
2. Calculation of the NCI share of equity ......................................................................................21
3. The effects of intragroup transactions on the calculation of the NCI （except dividend） ....24
4. The effects of dividend paid/declared by a subsidiary on the calculation of the NCI ..............25
第 2部分具体会计处理..................................................................................................................26
1. 总体处理思路...........................................................................................................................26
2. 重点例题...................................................................................................................................27
Part 4 Impairment of Assets and goodwill............................................................................................32
1. 基本会计处理...............................................................................................................................32
1. Cost Model ................................................................................................................................32
2. Revaluation Model....................................................................................................................32
3. Cash-generating units (CGUs) – excluding goodwill ................................................................33
4. CGU and goodwill......................................................................................................................36
5. Reversal of an impairment loss – individual assets ..................................................................37
2. 重点练习题 1................................................................................................................................38
3. 重点练习题 2................................................................................................................................40
4. 重点练习题 3................................................................................................................................42
5. 重点练习题 4................................................................................................................................44
6. 重点练习题 5................................................................................................................................49
7. 重点练习题 6................................................................................................................................51
Part 5 PP&E revaluation (Topic 3) – more than 1 years........................................................................54
1. 基本会计处理...............................................................................................................................54
1. Cost Model ................................................................................................................................54
2. Revaluation Model....................................................................................................................54
2. 基础例题.......................................................................................................................................55
3. 重点例题.......................................................................................................................................58
4. 其他重点习题 1............................................................................................................................61
5. 其他重点习题 2............................................................................................................................65
6. 其他重点习题 3............................................................................................................................68
Part 6 Share capital and reserves..........................................................................................................73
1. 基本会计处理...............................................................................................................................73
1.1全额付款（Share issue fully payable on application） .........................................................73
1.2 分期付款形式.........................................................................................................................74
1.3 Oversubscription (application申请认购金额 > shares offered) ...........................................77
1.4 Forfeited Shares （CR account） ...........................................................................................79
1.5 Share issue costs and formation cost的会计处理 ................................................................81
1.6 Private Placement (私募发行)的会计处理 ............................................................................81
1.7 Bonus Issues的会计处理 .......................................................................................................82
1.8 Share Option的会计处理 ......................................................................................................82
Part 1 Joint Arrangement
1. Accounting rule
(1) Accounting by the joint operation itself
• The journal entries represent the establishment of the joint operation
and its activities throughout the year.
• Transactions that occur regularly throughout the year, such as payment
of wages, are accumulated into one entry.
• In some cases, the costs may be transferred to the operators’ accounts
as expenses and matched in the records of the operators with the
revenue from sale of the output.
(2) Accounting by a joint operator
• The key feature of a joint operation is that the joint operator has an
interest in the individual assets and liabilities of the joint operation
• Its share of any jointly held assets
• Its share of any jointly held liabilities
• Its revenue from the sale of any output received from the
joint operation
• Its share of any revenue from the sale of any product that is
jointly constructed by the joint operators
• Its share of any expenses incurred by the joint operation
• Its expenses incurred in construction of a joint product.
2. 具体会计记录
Step 1: Contributions of assets to a joint operation and asset
records
On 1 July 2018, Tweed Ltd and Heads Ltd established a joint operation to manufacture a
product. Each company has a 50% interest in the operation and shares output equally. To
commence the operation, on 1 July 2018, Tweed Ltd contributed cash of $1 500 000 and
Heads Ltd contributed equipment which had a carrying amount of $1 000 000, and a fair value
of $1 500 000. The equipment is depreciated in the joint operation’s accounts at 10% p.a. on
cost
Records of Tweed Ltd
At 1 July 2018, Tweed Ltd gives up the cash contribution and recognises a share of the cash
and the equipment in the joint operation. Tweed Ltd will recognise a share of the fair value
of the asset.
The entry is:
Cash in JO Dr 750 000 [$1 500 000/2]
Equipment in JO Dr 750 000 [$1 500 000/2]
Cash Cr 1 500 000
The entry at 30 June 2019 in Tweed Ltd’s accounts is as follows.
Raw Material in JO Dr 50 000
Work in Progress in JO Dr 400 000
Inventories in JO Dr 100 000
Inventories[distributed] Dr 700 000 （1600k-200k）* 50% = 700k
Accum Depreciation — Equipment in JO Cr 75 000
Accounts Payable in JO Cr 60 000
Accrued Expenses in JO Cr 75 000
Bank Loan in JO Cr 500 000
Cash in JO Cr 540 000 [$750 000 − ($420 000/2)]
Records of Heads Ltd
In recording its contribution to the joint operation, Heads Ltd therefore recognises a gain on
selling half of the equipment to Tweed Ltd. (卖给对方的部分按照 FV计算)
Heads Ltd’s share of the equipment in the joint operation is then based on the original
carrying amount of the asset. （Equipment自己在 JO的部分按照 CA计算）
At 1 July 2018, Heads Ltd contributes equipment to the joint operation, this having a carrying
amount in Heads Ltd different from the fair value of the asset. In recording its contribution to
the joint operation, Heads Ltd therefore recognises a gain on selling half of the equipment to
Tweed Ltd. Heads Ltd’s share of the equipment in the joint operation is then based on the
original carrying amount of the asset. The entry is:
Cash in JO Dr 750 000 [$1 500 000/2]
Equipment in JO Dr 500 000 [$1 000 000/2]
Equipment Cr 1 000 000
Gain on Sale of Equipment Cr 250 000 [$500 000/2]
【The Same】
Step 2: Depreciation Adjustment
• The depreciation recognised by Tweed Ltd is $75 000, which is based on the fair value
of the asset.
• Heads Ltd needs to recognise only $50 000 depreciation, which is 10% of $500 000.
• A further entry is necessary to reduce the accumulated depreciation recognised by
Heads Ltd and to reduce the cost of the work in progress and inventories relating to
the joint operation.
Accumulated Depreciation — Equipment in JO Dr 25 000 [10% × ($750 000 − $500 000)]
Work in Progress in JO Cr 8 333
Inventories in JO Cr 2 083
Inventories Cr 14 584
Step 3: Management fees paid to a joint operator
For the joint operator that does supply the service, normally it would incur a cost to supply
the service and earn a profit on the supply of that service.
On 1 July 2019, Broome Ltd and Kalbarri Ltd agreed to a joint operation that would be involved
in the production of furniture. The contractual arrangement required both parties to invest
$270 000 cash in the joint operation with each party having a 50% interest in the joint
operation. Under the contractual arrangement the joint operation would distribute the
output equally to each operator.
The joint operation agreed to pay Broome Ltd $30 000 p.a. to supply management services to
the joint operation. The cost to Broome Ltd to supply these services is $24 000.
At 30 June 2020 the joint operation reported the following information
Required
Prepare the journal entries in the records of Broome Ltd in relation to the joint operation for
the year ending 30 June 2020.
Step 1
Broome Ltd ’s record on 1 July 2019:
Cash in JO Dr 270 000
Cash Cr 270 000
(Investment in JO with Kalbarri Ltd)
Step 2:
30 June 2020:
Inventory Dr 140 000 (280 000/2)
Raw materials in JO Dr 18 000 (36 000/2)
Inventory in JO Dr 10 000 (20 000/2)
Work in progress in JO Dr 27 000 (54 000/2)
Machinery in JO Dr 112 500 (225 000/2)
Accumulated depreciation –equipment – JO Cr 22 500 (45 000/2)
Accounts payable in JO Cr 22 500 (45 000/2)
Accrued wages in JO Cr 9 000 (18 000/2)
Cash in JO Cr 253 500 (270 000 - 33 000/2)
Management fees paid to a joint operator
Management services expense Dr 24 000
Cash Cr 24 000
(Cost of supplying services to JO)
Cash Dr 30 000
Management services revenue Cr 30 000
(Receipt from JO for supply of services)
Management services revenue Dr 12 000
Management services expense Cr 12 000
(Elimination of expense of supply of services to self: ½ x $24 000)
services to self: ½ x $24 000)
The profit element on supplying services to the JO is $6000 i.e. $30 000 less $24 000. The
profit to itself i.e. $3000 is proportionately adjusted across inventory-related assets:
Share of $3000
Work in progress in JO $27 000 $458
Inventory in JO 10 000 169
Inventory 140 000 2 373
177 000 3 000
Management services revenue Dr 3 000
Work in progress in JO Cr 458
Inventory in JO Cr 169
Inventory Cr 2 373
Part 2 Associate and Joint Ventures
1. Identification of investment
分类：分为控制（control）,共同控制（Joint Ventures）, 重大影响（Associates）和金融工具
投资（investment）
2. 关于 Associates和 Joint Venture 判定
（1）重大影响（significant influence判定）：
• power to participate in the financial and operating policy decisions of another company but
is not control or joint control over those policies.
• Some say 20% of the voting power is the ‘rebuttable presumption
v.s：Control: power to govern the financial and operating policies of another company so as to
obtain benefits from its activities
Essence of
relationship
Nature of
investment
Accounting treatment
Control Subsidiary Consolidation accounting using
entity concept
Significant
influence
Associate Equity accounting
Joint control Joint venture or
Joint operation
Equity accounting
Line-by-line method
Other
investment
Portfolio
investment
Cost or fair value basis

(2) Associates的判定识别
• Voting power - 20% to 50% of voting power leads to presumption of significant
influence
• Board representation
• Participation in decisions about dividends / profit retentions
• Material transactions between the investor and investee
• Exchange of managerial staff
• Provision of / dependence on technical information
(3) Joint Ventures (共同控制)判定
AASB 128 (para. 3) definitions
• A joint arrangement is “an arrangement of which two or more parties have joint
control”
Level of influence % of voting
shares (guide)
Valuation
method
Totally
independent
<20% Cost or Fair Value
basis (AASB 9)
Significant
influence but no
control
20-<50% Equity method
(AASB 128)
Control 50% and above Consolidation
(AASB 10&127)


• Joint control – contractually agreed sharing of control; exists only when decisions
about the relevant activities require unanimous consent of those sharing control
• Two types of joint arrangements; joint ventures and joint operations
• A joint venture is a “… joint arrangement whereby the parties that have joint
control of the arrangement have rights to the net assets of the arrangement” – use
equity accounting
• Joint operations typically share output – use proportional line-by-line accounting
(4) 设立 Associate and JV原因
• Spread risk across several investors, e.g in mining
• Project is too big for any single investor
• As a first step to an intended 100% merger,
• For strategic alliances
• Try a new business direction (toe in the water)
• To enter a foreign market, e.g. China
3. 会计处理原则（single-line method）
Step1: 初始确认：The asset “Investment in Associates and JVs” is initially recognized at cost (cost
method) –按投资额确认
Step 2: The asset is subsequently adjusted for:
 The post-acquisition change in the investor’s share of the investee’s net assets (e.g. due to
profitable operations)被投资方净资产变化的调整，包括两个部分
• “Share of profit/(loss) of Associates and JVs” –> 如被投资方有 P& L变化
• “Share of OCI of Associates and JVs”->如被投资方有 OCI变化
具体：
Initial investment in the associate (cost)
+/- investor’s share of profits/(losses)
+/- investor’s share of items of OCI
- reduced by distributions by the investee (e.g. dividends)
+/- investor’s share of increases/(decreases) in investee’s net assets
(other than P/L, OCI or distributions)
= Equity accounted carrying amount
类型 1: If the investor is not a parent
The equity method is applied in the investor’s books（权益法）
类型 2: If the investor is a parent
• Consolidation worksheet contains:
– Consolidation journals relating to subsidiaries
– Equity journals relating to associates
4. 重点例题 1 (不考虑 inter-entity transaction)
Alpha Ltd acquired 25% of the voting shares of Beta Ltd on 1 July 2019 for $80,000. At the date of
acquisition the shareholders equity of Beta is as follows:
Share Capital 250,000
Retained earnings 70,000
320,000
All assets are recorded at their fair value.
The following information relates to Beta Ltd:
30/6/20
Profit/(loss) after tax $60,000
Dividend paid $20,000
Asset Reval Reserve balance $2,000
Required:
Prepare the equity accounting journals at 1 July 2019 and 30 June 2020 assuming that:
(a) Alpha does not prepare consolidated financial statements
(b) Alpha prepares consolidated financial statements
类型 1: A不准备合并报表（not parent company）
Step1: 确认初始投资（1 July 2019: Investment in Beta Ltd）
Dr Investments in Associates/JVs 80,000
Cr Cash 80,000
Step 2: 确认被投资方 equity的变化，调整 investments in Associates金额
(a) Share of profit for the 2020 year (当期利润$60,000 x 25%)
Dr Investments in Associates/JVs 15,000
Cr Share of profit in Associates/JVs 15,000
(b) Dividend from Beta during 2020 (Dividend$20,000 x 25%)
Dr Cash 5,000
Cr Investments in Associates/JVs 5,000
(c) Share of revaluation increase recognised in OCI during 2020 ($2,000 x 25%)
Dr Investments in Associates/JVs 500
Cr Share of OCI of Associates/JVs 500
Dr Share of OCI of Associates/JVs 500
Cr Asset revaluation surplus 500
类型 2: A 准备合并报表（Parent company）
Step1: 确认初始投资（1 July 2019: Investment in Beta Ltd）
Dr Investments in Associates/JVs 80,000
Cr Cash 80,000
Step 2: 确认被投资方 equity的变化，调整 investments in Associates金额
The equity of Beta Ltd at 30 June 2020 is as follows:
30/6/20
Share Capital 250,000
Retained Earnings (70,000 + 60,000 – 20,000) 110,000
Asset Revaluation Reserve 2000
Total Shareholders’ equity 362,000
Multiply by 25% = 90,500
The Investment in Associates and JVs is
calculated as: 80,000 + 15,000 – 5,000 + 500 = 90,500
(a) Share of profit for the 2020 year (当期利润$60,000 x 25%)
Dr Investments in Associates/JVs 15,000
Cr Share of profit in Associates/JVs 15,000
(b) Share of revaluation increase recognised in OCI during 2020 ($2,000 x 25%)
Dr Investments in Associates/JVs 500
Cr Share of OCI of Associates/JVs 500
Dr Share of OCI of Associates/JVs 500
Cr Asset revaluation surplus 500
(c) Dividend处理不同
Dr Dividend revenue 5,000
Cr Investment in Associates and JVs 5,000
Dr: Cash 5,000
Cr: Dividend revenue 5,000
5. 重点例题 2 （考虑 inter-entity transaction）
Note: Alpha需要准备合并报表
Alpha Ltd acquired 25% of Beta Ltd on 1 July 2018 for $100,000.
At the date of acquisition the equity of Beta is:
Share Capital 250,000
Retained earnings 70,000
320,000
 Plant in Beta’s books was recorded at $10,000 below its fair value on 1 July 2018
The plant depreciation rate is 20%
The tax rate is 30%
 At 30 June 2020 Alpha held inventory acquired from Beta at profit of $5,000 to Beta
 On 1 July 2019 Alpha sold an item of plant & equipment to Beta for $90,000. The carrying
amount at the date of transfer was $50,000. The remaining useful life at date of transfer is
years
 Beta recorded a profit of $50,000 during the 2021 year.
 Opening post acquisition retained earnings at 1 July 2020 was $100,000
RE (2020/7/1) – RE (2018/7/1) = 100,000
Required:
(a) Determine the goodwill arising on acquisition of Beta
(b) Calculate Alpha’s share of Beta’s profit for the 2020 and 2021 years
(c) Prepare the equity entries required at 30 June 2021 (on consolidation) to account for Alpha’s
interest in Beta
(a) Step 1: acquisition analysis and goodwill calculation
(b) Calculations for adjustments to profit
1. FV adjustment to Plant $10,000/5 years = $2,000 x (1-30%) = $1,400 per year
2. Inventory – $5,000 x (1-30%); realised in 2021 year (when sold)
3. Plant sold by Alpha to Beta in 2019
Proceeds $90,000
WDV (50,000)
Gain 40,000
x 30% ITE (12,000)
A/tax profit 28,000
4. Depreciation of Plant $28,000/4 years useful life = $7,000 p.a.
Consideration 100,000
FVINA
- Book value (250,000 + 70,000) 320,000
- FV adj. Plant {10,000 x (1 – 30%)} 7,000
Total FVINA 327,000
Alpha’s share (25%) 81,750
Goodwill on acquisition 18,250
(c) Entries required for Y/E 30 June 2021
Step 1: Recognition of share of opening post acquisition retained earnings
Dr Investment in associates & JVs 18,175
Cr Retained earnings (Op. Bal) 18,175
Step 2: To recognise the share of profit for the 2021 year
Dr Investment in associates & JVs 14,775
Cr Share of profit of associates & JVs 14,775
6. 综合例题
Piano Ltd has a 30% interest in a joint venture, Mandolin Ltd, in which it invested $50 000 on 1
July 2014. The equity of Mandolin Ltd at the acquisition date was:
Share capital
Retained earnings
$ 30 000
120 000
All the identifiable assets and liabilities of Mandolin Ltd were recorded at amounts equal to their
fair values. Profits and dividends for the years ended 30 June 2015 to 2017 were as follows:
Profit before tax Income tax expense Dividends paid
2015
2016
2017
$80 000
70 000
60 000
$30 000
25 000
20 000
$80 000
15 000
10 000
*
Required
A. Prepare journal entries in the records of Piano Ltd for each of the years ended 30 June 2015
to 2017 in relation to its investment in the joint venture, Mandolin Ltd. (Assume Piano Ltd
does not prepare consolidated financial statements.)
B. Prepare the consolidation worksheet entries to account for Piano Ltd’s interest in the joint
venture, Mandolin Ltd. (Assume Piano Ltd does prepare consolidated financial statements.)
30%
Piano Ltd Mandolin Ltd
At 1 July 2014:
Net fair value of identifiable assets
and liabilities of Mandolin Ltd = $150 000
Net fair value acquired = 30% x $150 000
= $45 000
Consideration = $50 000
Goodwill = $5 000
1. Journal entries in the accounts of Piano Ltd
Step 1: 初始确认
1 July 2014 Investment in Mandolin Ltd Dr 50 000
Cash/Payable Cr 50 000
(Acquisition of shares in Mandolin Ltd)
Step 2: 2015年 equity变动导致 investment in M的变化
2014 – 2015 Cash Dr 24 000
Investment in Mandolin Ltd Cr 24 000
(Dividend received from Mandolin Ltd: 30% x
$80 000)
30 June 2015 Investment in Mandolin Ltd Dr 15 000
Share of profit or loss of
associates and joint ventures
Cr 15 000
(Recognition of profit in Mandolin Ltd:
30% x $50 000 profits after tax)
Step 2: 2016年 equity变动导致 investment in M的变化
2015 – 2016 Cash Dr 4 500
Investment in Mandolin Ltd Cr 4 500
(Dividend received: 30% x $15 000)
30 June 2016 Investment in Mandolin Ltd Dr 13 500
Share of profit or loss of
associates and joint ventures
Cr 13 500
(Recognition of profit in Mandolin Ltd:
30% x $45 000)
Step 3: 2075年 equity变动导致 investment in M的变化
2016– 2017 Cash Dr 3 000
Investment in Mandolin Ltd Cr 3 000
(Dividend from joint venture:
30% x $10 000)
Investment in Mandolin Ltd * Dr 12 000
Share of profit or loss of
associates and joint ventures
Cr 12 000
(Recognition of profit in Mandolin Ltd:
30% x $40 000)
2. Consolidation Worksheet Entries
Part 1: 2015年 7月 1号:
Current Period profits –无 Retained earnings调整
Investment in Mandolin Ltd Dr 15 000
Share of profit or loss of associates and
joint ventures Cr 15 000
(30% x $50 000)
Dividend revenue Dr 24 000
Investment in Mandolin Ltd Cr 24 000
(30% x $80 000)
Part 2: 30 June 2016:
Step 1: RE调整
120,000+(80,000-30,000-80,000) = 90,000 (o/b 16FY)
Opening post acquisition R/E/Profit of associate: 90,000-120,000=-30,000
Retained earnings (1/7/15) Dr 9 000
Investment in Mandolin Ltd Cr 9 000
(30% x $(30 000))
Step 2: Current profits调整
Investment in Mandolin Ltd Dr 13 500
Share of profits or losses of associates and
joint ventures Cr 13 500
(30% x $45 000)
Dividend revenue Dr 4 500
Investment in Mandolin Ltd Cr 4 500
(30% x $15 000)
Part 3: 30 June 2017:
Step 1: RE调整
90,000+70,000-25,000-15,000=120,000, o/b of 2017FY
Opening post acquisition R/E/Profit of associate: 120,000 – 120,000 = 0
Investment in Mandolin Ltd Dr 0
Retained earnings (1/7/16) Cr 0
Step 2: Current period调整
Investment in Mandolin Ltd Dr 12 000
Share of profit or loss of associates and
joint ventures Cr 12 000
(30% x $40 000)
Dividend revenue Dr 3 000
Investment in Mandolin Ltd Cr 3 000
(30% x $10 000)
Part 3 NCI and INCI
第 1部分：基础概念
1. Direct and indirect non-controlling interest structure
A DNCI = 30%
B DNCI = 40%
B INCI = 60% * 30% = 18%
B Total NCI = 40% + 18% = 58%
• 是否 Combination: P controls A and A controls B ——> P controls A/B ——> combination
2. Calculation of the NCI share of equity
(1) Method
 Direct NCI receives a proportionate share of all equity recorded by the subsidiary
(step 1/2/3)
 Indirect NCI receives a proportionate share of a subsidiary's post-acquisition
equity only (step 2/3)
(2) Reason
Avoid double accounts
• In pre-acquisition, DNCI in A has shares in A’s pre-acquisition net assets and one
of A’s assets in investment in B (并购日的净资产)，因此 A的 DNCI（即 B的 INCI，
同一 party）已经间接 own B’s net assets。如果再将 B 的 net assets 通过 pre-
acquisition journal entry allocate 到 B的 INCI，则会造成 double accounts的问题。
• In post-acquisition, B 的 equity变化不会反映到 A的 equity里，不反映在 A的 equity
里面（成本法计价），则不会造成 A的 DNCI（即 B的 INCI）的变动。因此 B的 equity
变化需要调整 total NCI（DNCI & INCI）
3. 针对 Non-sequential Acquisition 的特殊调整
• The intermediate subsidiary A acquires a lower level subsidiary B prior to it’s
acquisition by the ultimate parent P in the group
• one of the assets of the acquired subsidiary A for which the carrying amount may
differ from fair value is its “Investments in B”
• Investments in B must be adjusted to fair value on consolidation using BCVR
entries, with subsequent effects on pre-acquisition entries
(3) Demonstration
2016年 7月 1 日，P acquires 70% shares of A and A acquires 60% shares of B at the
same date. The fair value of all assets and liabilities of A/B is equal to the book value.
At the acquisition date, A’s share capital is 10,000 and retained earnings is 5,000, B’s
share capital is 12,000, and retained earnings is 3,000. 2019年 6月 30日，A’s retained
earnings is 45,000 and B’s retained earnings is 10,000. In FY 2020 (from 2019.7.1 –
2020.6.30)，A made profits of 10,000 and B made profits of 3,000.
Acquisition
Date
Beginning of
current period
End of current
period
Share of equity at
acquisition date
Share of change in equity from
acquisition date to beginning of current
year
Share of change in
equity in current
period
1 32
NCI share of recorded equity of the subsidiary
Assumption:
➢ The fair value of the assets is equal to the carrying amount of the assets. (No valuation
adjusting entries)
➢ Partial goodwill method is adopted
Step 1: NCI share of pre-acquisition equity
(a) To allocate NCI in A Ltd – DNCI of 30%
DR Share capital 3,000 A’s share capital at acquisition date * 30%
DR Retained earnings 1,500 A’s retained earnings at acquisition date*30%
CR Non-controlling interest 4,500 FVINA of A * 30%
(b) To allocate NCI in B Ltd – DNCI of 40%
DR Share capital 4,800 B’s share capital at acquisition date * 40%
DR Retained earnings (1/7/16) 1,200 B’s retained earnings at acquisition date*40%
CR Non-controlling interest 6,000 FVINA of B * 40%
Step 2: NCI share of post-acquisition equity prior to current period in A Ltd
(a) To allocate NCI in A LTD – DNCI of 30%
➢ Any movement in A’s equity will lead to the adjustment of NCI
➢ No BCVR adjustment
DR Retained earnings (45,000-5,000)*30%=12,000
CR Non-controlling interest 12,000
(b) To allocate NCI in B Ltd – DNCI: 40% + INCI: 18% = 58%
➢ Any movement in A’s equity will lead to the adjustment of NCI
DR Retained earnings (10,000-3,000)*58%=4,060
CR Non-controlling interest 4,060
Step 3: NCI share of current year profit
Assume no BCVR adjustment
(a) Current year profit of A Ltd – DNCI of 40%
DR NCI share of profit 4,000 A’s current year profit * 40%
CR Non-controlling interest 4,000 A’s current year profit * 40%
(b) Current year profit of B Ltd – DNCI: 40% + INCI: 18% = 58%
DR NCI share of profit 1,140 B’s current year profit * 38%
CR Non-controlling interest 1,140 B’s current year profit * 38%
3. The effects of intragroup transactions on the calculation of the
NCI（except dividend）
(1) Method
Adjusting the NCI for the effects of intragroup transactions, generally there is no
difference between INCI and DNCI.
(2) Calculation
Step 1: Fully Elimination entry for the intragroup transaction
Step 2: Adjustment to NCI
• If A Ltd earned unrealized profit/loss: whether by selling to P Ltd or B Ltd - the NCI
adjustment is based on the 40% DNCI in A Ltd
• If B Ltd made unrealized profit/loss: whether by selling to P Ltd or A Ltd - the NCI
adjustment is based on the total NCI in B Ltd of 58% (the sum of the 40% DNCI and
18% INCI).
• If P made the profit/loss by selling to A Ltd or B Ltd – No NCI adjustment
(3) Demonstration
Assume that during the current period B Ltd sold $25,000 worth of inventory to P Ltd at a profit
before tax of $5,000. The inventory is still on hand at the end of the current year. The
consolidation worksheet entries are:
Sale of inventory: B Ltd to P Ltd:
Step 1: Fully elimination for intra-group trasaction
Step 2: NCI adjustment for any movement in B
Dr: NCI 2,030 = (5000-1500)*58%
Cr: NCI share of profit 2,030
4. The effects of dividend paid/declared by a subsidiary on the
calculation of the NCI
(1) Method and reason
➢ Dividends are paid/payable by a subsidiary containing an INCI, adjustments are
necessary to ensure no double counting occurs.
➢ No dividend is paid directly to the INCI
➢ The INCI in B Ltd (DNCI in A) receiving a share of the profit of A Ltd, which
includes dividend revenue from B Ltd.
➢ When the DNCI in A Ltd receives a share of the profit of A Ltd, it receives a
share of the profit of B Ltd because the dividend paid by B Ltd is a distribution
of B Ltd's profit.
(2) Demonstration
Example 1: B Ltd paid dividend of $2,000
Step 1: Dividend paid by B Ltd (eliminate the A ‘dividend revenue from B)
Dr: Dividend Revenue 1,200
Cr: Dividend Paid 1,200
2000*60%
Step 2: NCI adjustment of B Ltd
Dr: NCI 800
Cr: Dividend Paid 800
(2,000*40%=800)
Step 3: NCI adjustment for A
Dr: NCI 360
Cr: NCI share of profit 360
Sales Dr 25,000
Cost of Sales Cr 20,000
Inventory Cr 5,000
Deferred Tax Asset Dr 1,500
Cr 1,500 Income Tax Expense
(1200*30%=360)
Example 2: B Ltd has declared a $3000 dividend but not paid it by the end of the period.
Dividend declared by B Ltd
Step 1: Dividend declared by B Ltd (eliminate the A ‘dividend revenue from B)
Step 2: NCI calculation for A Ltd
第 2部分具体会计处理
1. 总体处理思路
2笔交易：P ——> A; A ——> B
Step 1: 每一笔交易做 acquisition analysis
Step 2: 每一笔交易做 BCVR adjustment
Step 3: 每一笔交易做 pre-acquisition （仅调整母公司的部分）
Step 4: NCI 调整
Step 5: Intra-group transaction处理
• Fully elimination
• 子公司如有 unrealized profits，需要做 NCI调整
Dividend Payable Dr 1 800
Dividend Declared Cr 1 800
(60% × $3000)
Dividend Revenue Dr 1 800
Dividend Receivable Cr 1 800
NCI Dr 1 200
Dividend Declared Cr 1 200
(40% × $3000)
NCI Dr 540
NCI Share of Profit Cr 540
(30% × $1800)
2. 重点例题
P Ltd. acquired 70% interest in S Ltd on 1 July 2018 for $70,000 when the equity of S Ltd comprised:
Share capital 60,000
Retained earnings 33,000
$93,000
On that same day, S Ltd acquired 60% interest in T Ltd for $35,000, when the equity of T Ltd
comprised:
Share capital 35,000
Retained earnings 15,000
$50,000
The equity of S Ltd and T Ltd on 30 June 2019 and 30 June 2020 are summarised below
S Ltd
30/6/19 30/6/20
Share capital $60,000 60,000
Retained earnings 45,000 55,000
105,000 115,000
T Ltd
30/6/19 30/6/20
Share capital $35,000 35,000
General reserve 5,000 5,000
Retained earnings 18,000 23,000
58,000 63,000
• At acquisition S Ltd held inventory which was recorded at $10,000 below fair value. All of this
inventory was sold by 30 June 2019
• At acquisition T Ltd had plant which was recorded at $5,000 below fair value. The plant has a
remaining useful life of 5 years
• During the year ended 30 June 2020, S Ltd made a profit of $18,000 and paid a dividend of $8,000
• During the year ended 30 June 2020, T Ltd made a profit of $30,000 and paid a dividend of $25,000.
• The profit of $30,000 in T Ltd’s books includes an unrealised profit of $10,000 on the sale of
inventory to P Ltd. Total inter-entity sales during the year were $25,000.
Required:
• Prepare the consolidation journals as at 30 June 2020 for the P Ltd group
Step 1: 计算 Goodwill
(1) P ——> S Goodwill = 70,000 – [BV(assets) +10,000 * 70%] * 70% = 0
BV(assets) = 93,000
Step 2: BCVR adjusting journal entries
No entry
Step 3: Pre-acquisition entries – 2020/6/30
To eliminate P Ltd’s investment in S Ltd
DR Share capital 42,000 （60,000*70%=42,000）
DR Retained earnings 28,000 (33,000 + 7,000) x 70%
CR Inv in S Ltd. 70,000
2018年 7月 1日 pre-acquisition journal entry
Dr Inventory 10,000
Cr: DTL 3,000
Cr: BCVR 7,000
2019年 6月 30日 BCVR journal entries：
CR: COGs 10,000
Cr: ITE 3,000
Cr: transfer from BCVR 7,000
2019年 pre-acquisition journal entry
Dr: transfer from BCVR （BCVR下降，Retained Earnings上升）
Cr: BCVR ]
Step 4: NCI调整（与母公司 pre-acquisition journal entry分开考虑）
(1) 并购日 NCI调整
(a) To allocate NCI in S Ltd – DNCI of 30%
DR Share capital 18,000 (60,000*30%)
DR Retained earnings (1/7/19) 9,900 (33,000*30%)
DR BCVR 2,100 (inventory BCVR调整)
CR Non-controlling interest 30,000 （100,000 x 30%）
（2）并购日到当期期初（1/7/18-1/7/19）
To allocate NCI in S LTD – DNCI of 30%
DR Retained earnings (1/7/19) 3,600 (45,000-30,000)*30%
CR Non-controlling interest 3,600
DR Non-controlling interest 2,100
CR BCVR 2,100
可合并写成一个分录：
Dr: RE 3,600
Cr: BCVR 2,100
Cr: NCI 1,500
（3）Current Period （19/7/1-20/6/30）
(a) Current year profit of S Ltd
DR NCI share of profit 5400 (18,000*30%)
CR Non-controlling interest 5400
Step 1: 计算 Goodwill
(1) S ——> T Goodwill = 35,000 – [BV(assets) +5,000*70%] * 60% = 2,900
BV(assets) = 50,000
Step 2: BCVR adjusting journal entries – revaluation of T’s plant to FV
DR Plant 5,000
CR DTL 1,500
CR BCVR 3,500
DR Depreciation expense 1,000
DR Ret. earnings (1/7/19) 1,000 (5,000/5=1,000) (18/6/30-19/7/1)
CR Accum depreciation 2,000
DR DTL 600
CR ITE 300
CR Retained earnings (1/7/19) 300
Step 3: Pre-acquisition entries – 2020/6/30
To eliminate S Ltd’s investment in T Ltd
DR Share capital 21,000 （35,000*60%）
DR Retained earnings (1/7/19) 9,000 (15,000*60%)
DR BCVR 2,100 (3,500*60%)
DR Goodwill 2,900
CR Inv in T Ltd 35,000
Step 4: NCI调整（与母公司 pre-acquisition journal entry分开考虑）
(1) 并购日 NCI调整
To allocate NCI in T Ltd – DNCI of 40%
DR Share capital 14,000（并购日当天 SC 35000* 40%）
DR Retained earnings (1/7/19) 6,000 （并购日当天 15000 * 40%）
DR BCVR 1,400 （Plant BCVR 调整）
CR Non-controlling interest 21,400 （53,500 FVINA x 40%）
（2）并购日到当期期初（1/7/18-1/7/19）
To allocate NCI in T Ltd – DNCI: 40% + INCI: 18% = 58%
DR Retained earnings 1,334
DR General reserve 2,900 (5,000-0) * 58%
CR Non-controlling interest 4,234
Retained Earnings 计算：
（3）Current Period （19/7/1-20/6/30）
Current year profit of T Ltd
DR NCI share of profit 16,994 (30,000-700)*58%
CR Non-controlling interest 16,994
Step 5 Intra-group transaction elimination
（1）销售存货：Current year profit of T Ltd includes an unrealised profit of $10,000
DR Sales 25,000
CR Cost of Sales 15,000
CR Inventory 10,000
DR DTA 3,000
CR ITE 3,000
DR Non-controlling interest 4,060 (10,000-3,000)*58%
CR NCI share of profits 4,060
（2） Dividend调整
（a）S向 P分的 dividend
Step 1: To eliminate dividend paid by S Ltd to P Ltd
DR Dividend revenue 5,600 （8,000 * 70%）
CR Dividend paid 5,600
Step 2: To allocate dividend paid by S Ltd to NCI – DNCI of 30%
DR Non-controlling interest 2,400
Opening retained earnings (30/6/19) 18,000
Less: pre-acquisition retained earnings (15,000)
Post acquisition retained earnings 3,000
Dep’n adjustment after tax (700)
Adjusted retained earnings 2,300
X NCI share of 58% 1,334
CR Dividend paid 2,400 (8,000*30%)
(b) T向 S分的 dividend
Step 1: To eliminate dividend paid by T Ltd to S Ltd
DR Dividend revenue 15,000 (25,000 * 60%)
CR Dividend paid 15,000
Step 2: T的 DNCI调整
DR Non-controlling interest 10,000 (25,000 * 40%) – T 的 DNCI
CR Dividend paid 10,000
Step 3: T的 INCI调整 （S profit elimination造成的 S equity下降）
DR Non-controlling interest 4,500
CR NCI Share of Profit 4,500 ($25,000 x 60%) x 30%
Part 4 Impairment of Assets and goodwill
1. 基本会计处理
1. Cost Model
Example – Cost model
An asset has a CA of $100 (cost of $160) and a RA of $90.
The journal entry to record the impairment loss would be:
Dr Impairment loss 10
Cr Accum. Dep’n & Impairment losses10
2. Revaluation Model
An asset has a recorded FV of $120, Accum. Dep’n of $20 (CA = $100) and a RA
of $90. The asset was previously revalued upwards by $50 (ARevS balance =
$35; DTL balance = $15 assuming a 30% tax rate)
The journal entries to record the impairment loss would be:
Dr Accumulated depreciation 20
Cr Asset 20
Dr Asset revaluation surplus7
Dr Deferred tax liability 3
Cr Asset 10
• An impairment loss occurs when an asset’s carrying amount (CA) is
more than its recoverable amount (RA)
• RA = higher of (a) Value-in-use (NPV) and (b) Fair Value less costs to sell
3. Cash-generating units (CGUs) – excluding goodwill
• An impairment loss arises when the CA of the CGU assets > RA
• Determining the impairment loss
• Principles for determining RA are the same for CGUs as for
individual assets
• Accounting for the impairment loss
• The loss is allocated to each asset in the CGU on a pro-rata basis
• Based on the CA of each asset / the total CA amount of the CGU
assets
• Losses are accounted for in the same way as for individual assets
• The CA of an individual asset cannot be reduced below the highest of:
• FV-CD (if determinable);
• VIU (if determinable); or
• Zero
重点练习题：
A Ltd has identified an impairment loss of $12,000 on one of its CGUs
The CGU consists of the following assets (stated at current carrying amounts):
• Buildings 500,000
• Equipment 300,000
• Land 250,000
• Fittings 150,000
The Recoverable Amount (FV-CD) of the building is $497,000
Required:
Calculate the allocation of impairment loss against all assets in the CGU
方法 1:
Step 1: 将 Impairment分配到 individual资产（按照 individual assets的 CA
／Total Asset CA）
Step 2: 将超过单项资产 Impairment最大值的 Impairment loss调低，超过
部分 Allocate到其他资产（按照单项资产 Adj CA/Total Adj CA）
As the FV-CD of the building is $497,000, the maximum impairment loss that
can be allocated to the building is limited to $3,000. The remaining $2,000
must be allocated across the other assets in the CGU
CA Pro-
rata
Impairment
loss allocated
Adjusted CA
Buildings 500,000 5/12 5,000 495,000
Equipment 300,000 3/12 3,000 297,000
Land 250,000 2.5/12 2,500 247,500
Fittings 150,000 1.5/12 1,500 148,500
1,200,000 12,000
方法 2:
Step 1: 找到 FV-CD或 VIU的 ASSETS，计算这些资产 impairment loss的最大
值
Buildings : 500k * 5/12 = 5000
FV-CD = 497k，Maximize的 impairment = 500k – 497k = 3k
Step 2: 将剩余 Impairment分配到其他资产（按照 individual assets的 CA／
Total Asset CA）
12k-3k=9k
Adjusted
CA
Pro-rata Impairment
loss allocated
Total impairment
loss allocated
Buildings 3,000
Equipment 297,000 297/693 857 3,857
Land 247,500 247.5/693 714 3,214
Fittings 148,500 148.5/693 429 1,929
693,000 2,000 12,000
CA Pro-rata Impairment loss
allocated
Buildings 500,000 3000
Equipment 300,000 3/7 3,857
Land 250,000 2.5/7 3,214
Fittings 150,000 1.5/7 1,929
700, 000 9,000
4. CGU and goodwill
• Where a CGU has goodwill allocated to it, the CGU must be tested for
impairment at least annually, Or
more frequently if there is an indication that the CGU may be impaired
• Where RA > CA, no impairment; goodwill remains unadjusted
• Where CA > RA, impairment loss = CA-RA
• When an impairment loss arises in a CGU with goodwill the following
allocation rules apply:
– To reduce the carrying amount of the CGU’s goodwill first
(to zero if necessary)
– To the other assets of the CGU on a pro rata basis (on the
same basis as discussed previously)
Example:
A Ltd has identified an impairment loss of $300,000 on one of its CGUs
The CGU consists of the following assets (stated at current carrying amounts):
• Buildings 500,000
• Equipment 300,000
• Land 250,000
• Goodwill 150,000
Required:
Calculate the allocation of impairment loss against all assets in the CGU.
Remaining impairment loss still to be allocated = $150,000
500/1,050 x $150,000 = 71,429
5. Reversal of an impairment loss – individual assets
Cost Model
The new CA cannot be higher than the CA that would have been determined
had no impairment loss been previously recognised
Dr Accum dep’n & impairment losses xx
Cr Income - impairment loss reversal xx
Revaluation model
• Where the impairment loss was taken to the P&L the journal entry
would be the same as that shown above under the cost model
• Where the impairment loss was taken against the ARevS the journal
entry to record the reversal of the impairment loss would be:
Dr Asset xx
Cr Deferred tax liability xx
Cr Asset revaluation surplus xx
CA Pro-rata Impairment loss
allocated
Adjusted CA
Goodwill 150,000 150,000* -
Buildings 500,000 500/1,050 71,429** 428,571
Equipment 300,000 300/1,050 42,857 257,143
Land 250,000 250/1,050 35,714 214,286
1,050,000 300,000
2. 重点练习题 1
Spear Ltd reported the following information in its statement of financial
position at 30 June 2015:
Plant $650 000
Accumulated depreciation – plant(150 000)
Intangible assets 300 000
Accumulated amortisation (100 000)
Land 300 000
Total non-current assets 1 000 000
Cash 50 000
Inventory 180 000
Total current assets 230 000
Total assets $1 230 000
Liabilities 150 000
Net assets $1 080 000
At 30 June 2015, Spear Ltd analysed the internal and external sources of
information that would indicate deterioration in the worth of its assets. It
determined that there were indications of impairment.
Spear Ltd calculated the recoverable amount of the assets to be $980 000.
Required
Provide the journal entry for any impairment loss at 30 June 2015.
Carrying amount of assets = $1 230 000
Recoverable amount = $980 000
Impairment loss = $250 000
Assuming the inventory is carried at the lower of cost and net realisable value,
the allocation of the impairment loss will not involve both cash and inventory.
The allocation of the impairment loss is as follows:
Carrying Proportion Allocation Net Carrying
Amount of Loss Amount
Plant $500 000 5/10 125 000 375 000
Intangibles 200 000 2/10 50 000 150 000
Land 300 000 3/10 75 000 225 000
$1 000 000 250 000
The journal entry to record the impairment loss is:
Impairment loss Dr 250 000
Accumulated depreciation and
impairment losses –plant Cr 125 000
Accumulated amortisation and
impairment losses –intangibles Cr 150 000
Land Cr 75 000
(Allocation of impairment loss)
3. 重点练习题 2
Bow Ltd reported the following assets in its statement of financial position
at 30 June 2015:
Plant $800 000
Accumulated depreciation (240 000)
Land 300 000
Patent 240 000
Office equipment 620 000
Accumulated depreciation (340 000)
Inventory 220 000
Cash and cash equivalents 180 000
$1 780 000
The recoverable amount of the entity was calculated to be $1 660 000. The
fair value less costs of disposal of the land was $280 913.
Required
Prepare the journal entry for any impairment loss at 30 June 2015.
Carrying amount of assets = $1 780 000
Recoverable amount = $1 660 000
Impairment loss = $120 000
Assuming the inventory is carried at the lower of cost and net realisable value,
the allocation of the impairment loss will not involve both cash and inventory.
The allocation of the impairment loss is as follows:
Carrying Proportion Allocation Net Carrying
Amount of Loss Amount
Plant $560 000 56/138 48 696 511 304
Land 300 000 30/138 26 087 273 913
Patent 240 000 24/138 20 870 219 130
Office equipment280 000 28/138 24 347 255 653
$1 380 000 120 000
If the fair value less costs of disposal of the land is $280 913, then the land
cannot be written down to an amount below that figure. Hence the maximum
impairment loss allocable to land is $19 087. The extra $7000 must be allocated
to the other assets.
Carrying Proportion Allocation Net Carrying
Amount of Loss Amount
Plant $511 304 511 304/986 087 3 630 507 674
Patent 219 130 219 130/986 087 1 555 217 575
Office equipment255 653255 653/986 087 1 815 253 838
$986 087 7 000
The journal entry to record the impairment loss is:
Impairment loss Dr 120 000
Accumulated depreciation and
impairment losses –plant Cr 52 326
Land Cr 19 087
Accumulated amortisation and
impairment losses – patent Cr 22 425
Accumulated depreciation and
impairment losses –office equipment Cr 26 162
(Allocation of impairment loss)
4. 重点练习题 3
Crossbow Ltd is an entity that specialises in the manufacture of leather
footwear for women. It has aggressively undertaken a strategy of buying out
other companies that had competing products. These companies were
liquidated and the assets and liabilities brought into Crossbow Ltd.
At 30 June 2015, Crossbow Ltd reported the following assets in its
statement of financial position:
Cash $20 000
Leather and other inventory products 180 000
Brand ‘Crossbow Shoes’ 160 000
Shoe factory at cost 820 000
Accumulated depreciation – factory (120 000)
Machinery for manufacturing shoes 640 000
Accumulated depreciation – machinery(240 000)
Goodwill on acquisition of competing companies40 000
$1 500 000
Because of the competition from overseas as customers pursue a strategy of
buying online rather than visit Crossbow Ltd’s stores, Crossbow Ltd
assessed its impairment position at 30 June 2015. The indicators suggested
that an impairment loss was probable. Crossbow Ltd calculated a
recoverable amount of its company of $1 420 000.
Required
Prepare the journal entry(ies) for any impairment loss occurring at 30 June
2015.
Carrying amount of assets = $1 500 000
Recoverable amount = $1 420 000
Impairment loss = $80 000
The impairment loss is firstly used to write off the goodwill of $40 000.
The balance of the loss, $40 000, is allocated across the other assets, except for
cash and inventory, assuming it is recorded at the lower of cost and net
realisable value:
Carrying Proportion Allocation Net Carrying
Amount of Loss Amount
Brand 160 000 16/126 5 079 154 921
Factory 700 000 70/126 22 222 677 778
Machinery 400 000 40/126 12 699 387 301
1 260 000 40 000
The journal entry to record the impairment loss is:
Impairment loss Dr 80 000
Goodwill Cr 40 000
Accumulated amortisation and
impairment losses – brand Cr 5 079
Accumulated depreciation and
impairment losses –factory Cr 22 222
Accumulated depreciation and
impairment losses –machinery Cr 12 699
(Allocation of impairment loss)
5. 重点练习题 4
Mace Ltd manufactures glass and glass products. Mace Ltd has organised
itself into a number of divisions each of which has a different function. For
example, one division deals with the manufacture of glass bottles for
containing various drinks such as water and wine while another division
produces bottles associated with the perfume industry. Each of these
divisions is regarded as a separate cash-generating unit (CGU) for
accounting purposes.
One of the divisions of Mace Ltd is associated with the production of glass
used for the bottling of fruit products. At 30 June 2015, the carrying amounts
of the assets of this division were as follows:
Non-current assets
Glass bottling factory
Accumulated depreciation —
buildings
Equipment
Accumulated depreciation —
equipment
Goodwill
$336 000
(144
000)
176 000
(32 000)
12 000
Current assets
Inventory
Receivables
Cash
64 000
28 000
16 000
At 30 June 2015, Mace Ltd was concerned that the assets of this division were
impaired. Many fruit products were now being bottled in plastic rather than
glass meaning that the demand for glass bottles for bottling fruit had
suffered a decline. Subsequent to assessing the indicators of impairment,
Mace Ltd believed that the assets of the division were impaired. Mace Ltd
calculated the recoverable amount of the fruit-bottling division to be $428
000.
In preparing the financial statements at 30 June 2015 Mace Ltd allocated the
impaired loss to the relevant assets, assuming the receivables were
collectable. Mace Ltd also changed its method of measuring the depreciation
of the factory and equipment for the 2015–16 period, increasing the
depreciation charge on the factory from $48 000 to $52 000 p.a., and from
$36 000 to $40 000 p.a. for equipment.
During the 2015–16 period, the market experienced dissatisfaction with the
use of plastic for the bottling of fruit as users were worried about
contamination if held for long periods. As a result the market demand for
glass bottles increased. Mace Ltd believed that it could reverse the previous
impairment and assessed the recoverable amount of the division at $24 000
greater than the carrying amount of the assets of the unit. For the 2015–16
financial statements, Mace Ltd accounted for a reversal of the previous
impairment loss.
Required
A.Prepare the journal entry(ies) for Mace Ltd at 30 June 2015 for the
impairment of the assets.
B. (i) Prepare the journal entry(ies) for Mace Ltd at 30 June 2016 for
reversal of the prior impairment loss.
(ii) What differences would occur in this entry(ies) if the recoverable
amount at 30 June 2016 was $16 000 greater than the carrying amount of
assets of the division?
(iii)If the recoverable amount of the factory at 30 June 2016 was $140 000,
how would this change the entry(ies) in B(ii)?
A.
Carrying amount of assets:
Factory $192 000
Equipment 144 000
Goodwill 12 000
Inventory 64 000
Receivables 28 000
Cash 16 000
456 000
Recoverable amount 428 000
Impairment loss $28 000
Goodwill is written down by $12 000, and the balance of the impairment loss,
namely $16,000 is written off across the other relevant assets:
Carrying Proportion AllocationNet Carrying
Amount of Loss Amount
Factory 192 000 192/336 9 143 182 857
Equipment 144 000 144/336 6 857 137 143
336 000 16 000
The impairment journal entry at 30 June 2015 is:
Impairment loss Dr 28 000
Goodwill Cr 12 000
Accumulated depreciation and
impairment losses – factory Cr 9 143
Accumulated depreciation and
impairment losses – equipment Cr 6 857
(Allocation of impairment loss)
B (i)
At 30 June 2016, the two assets are reported as follows:
Factory $336 000
Accumulated depreciation
and impairment losses 205 143[144 000 + 9 143 + 52 000]
130 857
Equipment $176 000
Accumulated depreciation and
impairment losses 78 857[32 000 + 6 857 + 40 000]
97 143
The carrying amounts of these assets if no impairment loss had occurred would
have been:
Factory $336 000
Accumulated depreciation
and impairment losses 192 000 [144 000 + 48 000]
144 000
Equipment $176 000
Accumulated depreciation and
impairment losses 68 000 [32 000 + 36 000]
108 000
The differences between the carrying amounts recorded at 30 June 2016 and the
carrying amounts if no impairment losses had been recorded are:
Factory $13 143 [144 000 – 130 857]
Equipment $10 857 [108 000 – 97 143]
$24 000
As the recoverable amount at 30 June 2016 exceeds the carrying amount by $24
000, then the total differences can be recognised as:
Accumulated depreciation and
impairment losses – factory Dr 13 143
Accumulated depreciation and
impairment losses – equipment Dr 10 857
Income: reversal of impairment loss Cr. 24 000
(Reversal of impairment loss)
B (ii)
If the excess of the recoverable amount over carrying amounts at 30 June 2016
was only $16,000, then the reversal would be based on a pro rata allocation
based on carrying amounts at time of reversal:
Carrying Proportion AllocationNet Carrying
Amount of Excess Amount
Factory 130 857130 857/228000 9 183 140 040
Equipment 97 143 97 143/228000 6 817 103 960
228 000 16 000
The entry would be:
Accumulated depreciation and
impairment losses – factory Dr 9 183
Accumulated depreciation and
Impairment losses – equipment Dr 6 817
Income: reversal of impairment loss Cr 16 000
(Reversal of impairment loss)
B (iii)
If the recoverable amount of the factory at 30 June 2016 was only $140 000,
then the reversal of the impairment for the factory could only be $9 143(i.e.
$140 000 less $130 857). Hence the balance of $40 (i.e. $9 183 - $9 143) could
be allocated to equipment.
The journal entry is:
Accumulated depreciation and
impairment losses – factory Dr 9 143
Accumulated depreciation and
impairment losses – equipment Dr 6 857
Income: reversal of impairment loss Cr 16 000
(Reversal of impairment loss)
The $6 857 allocated to equipment still does not exceed the carrying amount if
the asset had never been impaired. The equipment will now be shown as:
Equipment $176 000
Accumulated depreciation and
impairment losses 72 000[32 000 + 6 857 +40 000 – 6 857]
$104 000
6. 重点练习题 5
Saxon Ltd conducted an impairment test at 30 June 2015. As a part of that
exercise, it measured the recoverable amount of the entity, considered to be
a single cash-generating unit, to be $217 600. The carrying amounts of the
assets of the entity at 30 June 2015 were:
Equipment
Accumulated
depreciation
Patent
Goodwill
Inventory
Receivables
200
000
(40 000)
40 000
6 400
32 000
1 600
The receivables held by Saxon Ltd were all considered to be collectable.
The inventory was measured in accordance with AASB 102 Inventories.
For the period ending 30 June 2016, the depreciation charge on equipment
was $14 720. If the equipment had not been impaired the charge would have
been $20 000.
At 30 June 2016, the recoverable amount of the entity was calculated to be
$10 400 greater than the carrying amount of the assets of the entity. As a
result, Saxon Ltd recognised a reversal of the previous year’s impairment
loss.
Required
Prepare the journal entry(ies) accounting for the impairment loss at 30 June
2015 and the reversal of the impairment loss at 30 June 2016.
Impairment loss is $22 400 i.e. $240 000 less $217 600.
The goodwill of $6 400 is written off.
The remaining $16 000 impairment loss is allocated as follows:
Carrying Amount Allocation Net Amount
Patent 40 000 3 200 36 800
Equipment 160 000 12 800 147 200
200 000 16 000 184 000
At 30 June 2015, the journal entry to record the impairment is:
Impairment loss Dr 22 400
Patent Cr 3 200
Goodwill Cr 6 400
Accumulated depreciation &
impairment losses – equipment Cr 12 800
At 30 June 2016, in relation to the assets previously adjusted for impairment:
CA at 30/6/15 CA – if no impairment
Difference
Patent 36 800 40 000 3 200
Equipment 200 000 200 000
Accumulated depreciation &
impairment losses (67 520*) (60 000) 7 520
10 720
*Accum depn & impairment losses – Equip: $40,000 + 12 800 + 14 720
As the recoverable amount at 30 June 2016 is only $10 400 greater than the
carrying amount of the entity, this is the maximum reversal amount. The $10
400 reversal is allocated as follows:
CA at 30/6/15 Allocation
Patent 36 800 2 261
Equipment 132 480 8 139
169 280 10 400
However, the equipment can only be revalued upwards by $7 520. The balance
of $619 is allocated to the patent which increases its allocation to $2 880 which
is still less than $3 200.
The reversal is then accounted for as follows:
Accumulated amortisation and impairment losses
- patent Dr 2 880
Accumulated depreciation & impairment losses
- equipment Dr 7 520
Income – reversal of impairment loss Cr 10 400
7. 重点练习题 6
The two cash-generating units of Dark Forest Ltd are referred to as the Lady
CGU and the Lake CGU. At 31 July 2015, the carrying amounts of the assets
of the two divisions were:
Lady CGU Lake CGU
Equipment
Accumulated
depreciation
Brand
Inventory
Receivables
Goodwill
$9000
(3900)
1440
324
450
150
$7 200
(2 250)
—
450
492
120
The receivables were regarded as collectable, and the inventory was
measured according to AASB 102 Inventories. The brand had a fair value
less costs of disposal of $1320. The equipment held by the Lady CGU was
depreciated at $1800 p.a., and the equipment of Lake CGU was depreciated
at $1500 p.a.
Dark Forest Ltd undertook impairment testing in July 2015, and
determined the recoverable amounts of the two CGUs at 31 July 2015 to be:
Lady CGU
Lake CGU
$626
4
5940
The relevant assets were written down as a result of the impairment testing
affecting the financial statements of Dark Forest Ltd at 31 July 2015. As a
result of the impairment testing management re-assessed the factors
affecting the depreciation of its non-current asset. The depreciation of the
equipment held by the Lady CGU was increased from $1800 p.a. to $2100
p.a. for the year 2015–16.
By 31 July 2016, the performance in both divisions had improved, and the
carrying amounts of the assets of both divisions and their recoverable
amounts were as follows:
Lady
CGU
Lake
CGU
Carrying amounts of assets
Recoverable amount of
CGU
$7932
9012
$859
8
9120
Required
Determine how Dark Forest Ltd should account for the results of the
impairment tests at both 31 July 2015 and 31 July 2016.
Lady CGU Lake CGU
Equipment $5100 4950
Brand 1440 0
Inventory 324 450
Receivables 450 492
Goodwill 150 120
7464 6012
Recoverable amount 6264 5940
Impairment loss (1200) (72)
In relation to the Lake CGU, write goodwill down by $72:
Impairment loss Dr 72
Accumulated impairment losses
- goodwill Cr 72
In relation to the Lady CGU, reduce goodwill by $150 and allocate the
remaining $1050 impairment loss to applicable assets:
Carrying Proportion AllocationNet Carrying
Amount of Excess Amount
Equipment 5100 510/654 816 4284
Brand 1440 144/654 234 1206
6540 1050
As the brand has a fair value less costs of disposal of $1320, only $120 of the
impairment loss can be allocated to it, so the equipment must be reduced by a
further $114, to $4170.
The journal entry to record the impairment loss at 31 July 2015 is:
Impairment loss Dr 1200
Goodwill Cr 150
Accumulated depreciation and
impairment losses – equipment Cr 930
Accumulated impairment losses – brand Cr 120
(Allocation of impairment loss)
At 31 July 2016, the equipment and brand are recorded as follows:
Equipment $9000
Accumulated depreciation and
impairment losses (6930) [3900 +930 +2100]
2070
Brand $1440
Accumulated impairment losses (120)
1320
At 31 July 2016:
In relation to the Lake CGU, there can be no reversal of the prior goodwill
impairment.
In relation to the Lady CGU, the equipment would have had the following
carrying amount if the impairment loss had not occurred:
Equipment $9000
Accumulated depreciation and
impairment losses (5700) [3900 + 1800]
3300
Hence, the maximum reversal of impairment in relation to equipment is $1230
(ie $3300 - $2070). The maximum reversal for the brand is $120.
As the recoverable amount for the Lady CGU’s assets exceed the carrying
amount by $1080 [ie $9012 – 7932], the whole of this amount can be allocated
on a pro rata basis as a reversal of impairment losses:
Carrying Proportion AllocationNet Carrying
Amount of Excess Amount
Equipment 2070 207/339 660 1410
Brand 1320 132/339 420 900
3390 1080
As the brand can only be reversed to the extent of $120, then $300 can be
allocated to equipment. The adjusted allocation for equipment is now $960
which is less than the maximum adjustment amount of $1230.
The entry for the reversal of the impairment loss is:
Accumulated depreciation and
impairment losses – equipment Dr 960
Accumulated impairment losses – brand Dr 120
Income: reversal of impairment loss Cr 1080
(Reversal of impairment loss)
Part 5 PP&E revaluation (Topic 3) – more than 1 years
1. 基本会计处理
1. Cost Model
Value of PP & E = Original Cost – Accumulated Depreciation – Impairment Loss
2. Revaluation Model
Land增值
Step 1: Record the revaluation increase in Other Comprehensive Income
Dr Land 10,000
Cr Gain on revaluation – OCI 10,000
Step 2: Record the tax effect
Dr Income tax expense - OCI 3,000
Cr Deferred tax liability 3,000
Tax effect of revaluation gain 30% x $10k
Step 3: Transfer the gain to equity
Dr Gain on revaluation – OCI 10,000
Cr Income tax expense - OCI 3,000
Cr Asset revaluation surplus 7,000
2. 基础例题
ABC Ltd has decided to change from the cost model to the revaluation model
to account for plant. At 30 June 2016 ABC Ltd owned the following plant items:
A revaluation increase will be recorded for Plant A and a revaluation decrease
will be recorded for Plant B.
(1)关于 Plant A增值的处理
情形 1: Plant A此前没有任何减值
Step 1: Write off the accumulated depreciation
Dr Accum. depreciation 120,000
Cost Accum. dep’n Carrying value Fair value Increases/
(Decreases)
= FV - CV
Plant A 200,000 120,000 80,000 150,000 70,000
Plant B 140,000 40,000 100,000 80,000 (20,000)
TOTAL 340,000 160,000 180,000 230,000 50,000
Cr Plant 120,000
Step 2: Record the revaluation increase in OCI
Dr Plant 70,000
Cr Gain on revaluation – OCI 70,000
Step 3: Record the tax effect of the revaluation
Dr Income tax expense - OCI 21,000
Cr Deferred tax liability 21,000
Tax effect of revaluation gain 30% x $70k
Step 4: Transfer the gain to equity [asset revaluation surplus]
Dr Revaluation gain – OCI 70,000
Cr Income tax expense - OCI 21,000
Cr Asset revaluation surplus 49,000
情形 2: Plant A此前有减值，且此次 revaluation增值幅度<此前的减值金
额
假设：In relation to Plant A, assume that a gross revaluation decrease of
$80,000 had been made in 2014.
Step 1: Removal of existing accumulated depreciation prior to revaluation
Dr Accum. depreciation 120,000
Cr Plant 120,000
Step 2: Revaluation of plant to fair value
Dr Plant 70,000
Cr Revaluation gain – P&L 70,000
情形 3: Plant A此前有减值，且此次 revaluation增值幅度>此前减值金额，
分 3步处理, In relation to Plant A, assume that a gross revaluation decrease
of $20,000 had been made in 2014.
（1）Step 1: 将 Accumulated Depreciation转入 Plant
Dr：Accumulated Depreciation 120,000
Cr: Plant 120,000
（2）Step 2: Revaluation of plant to fair value
Dr: Plant 70,000
Cr: Revaluation Gain - P&L 20,000
Cr: Revaluation Gain – OCI 50,000
（3）Step 3: Record the tax effect of the revaluation
Dr Income tax expense - OCI 15,000
Cr Deferred tax liability 15,000
Step 4: Transfer the gain to equity [asset revaluation surplus]
Dr Revaluation gain – OCI 50,000
Cr Income tax expense - OCI 15,000
Cr Asset revaluation surplus 35,000
（2）关于 Plant B 减值的处理
情形 1: Plant B此前没有任何的 revaluation increasing （增值）
Dr Accum. depreciation 40,000
Dr Loss on devaluation - P&L 20,000
Cr Plant 60,000
情形 2: Plant B此前有 Revaluation increasing
In relation to Plant B, assume that a gross revaluation increase of $15,000 had
been made in 2014.
Step 1: Removal of existing accumulated depreciation prior to revaluation
Dr Accum. depreciation 40,000
Cr Plant 40,000
Step 2: Devaluation of plant to fair value
Dr Loss on devaluation – OCI 15,000
Dr Loss on devaluation – P&L 5,000
Cr Plant 20,000
Step 3: Tax effect of OCI调整
Dr Deferred tax liability 4,500
Cr Income tax expense - OCI 4,500
Step 4: Removal of net revaluation gain from equity
Dr Asset revaluation surplus 10,500
Dr Income tax expense - OCI 4,500
Cr Loss on devaluation - OCI 15,000
3. 重点例题
In the 30 June 2016 annual report of Payback Ltd, the equipment was reported as
follows: The equipment consisted of two machines, Machine A and Machine B.
Machine A had cost $300 000 and had a carrying amount of $180 000 at 30 June
2016, and Machine B had cost $200 000 and was carried at $170 000. Both
machines are measured using the cost model, and depreciated on a straight-line
basis over a 10-year period.
On 31 December 2016, the directors of Payback Ltd decided to change the basis
of measuring the equipment from the cost model to the revaluation model.
Machine A was revalued to $180 000 with an expected useful life of 6 years, and
Machine B was revalued to $155 000 with an expected useful life of 5 years.
At 30 June 2017, Machine A was assessed to have a fair value of $163 000 with
an expected useful life of 5 years, and Machine B’s fair value was $136 500 with
an expected useful life of 4 years. The tax rate is 30%.
Required
A. Prepare the journal entries during the period 1 July 2016 to 30 June 2017 in
relation
to the equipment.
B. According to accounting standards, on what basis may management change
the method of asset measurement, for example from cost to fair value?
PAYBACK LTD 31 December 2016
Step 1: 提折旧（从题目给定的 CA的日期-Change Model的日期）
• Change from cost model to revaluation model是 2016年 12月 31日
• 给定的 CA的日期是 2016年 6月 30日
Depreciation expense – Machine A Dr 15 000
Accumulated depreciation Cr 15 000
(1/2 x 10% x $300 000)——> 半年折旧
Depreciation expense – Machine B Dr 10 000
Accumulated depreciation Cr 10 000
(1/2 x 10% x $200 000)
Step 2: 判断增减变动（使用以下模版）
Machine A Machine B
Cost 300 000 Cost 200 000
Accum depn 135 000 Accum depn 40 000
Carrying Amount 165 000 Carrying Amount 160 000
Fair value 180 000 Fair value 155 000
Increment 15 000 Decrement 5 000
（1）关于Machine A
Step 1: Write-off折旧
Accumulated depreciation – Machine A Dr 135 000
Machine A Cr 135 000
(Writing the asset down to carrying amount)
Step 2: Record Gain on revaluation-OCI (以前没有贬值)
Machine A Dr 15 000
Gain on revaluation of machinery (OCI) Cr 15 000
(Revaluation of asset)
Step 3: 增值 OCI涉及的税收影响（Tax effect of revaluation）
Income tax expense – gain on revaluation of asset (OCI) Dr 4 500
Deferred tax liability Cr 4 500
(Tax-effect of revaluation)
Step 4: Accumulation of net revaluation gain in equity
Gain on revaluation of machinery (OCI) Dr 15 000
Income tax expense (OCI) Cr 4 500
Asset revaluation surplus – Machine A Cr 10 500
（2）关于Machine B
Step 1: Write-off depreciation
Accumulated depreciation – Machine B Dr 40 000
Machine B Cr 40 000
Step 2: Revaluation of machine from $200 000 to $155 000
Loss on devaluation – P & L Dr 5 000
Machine B Cr 5 000
30 June 2017
Step 1: 提折旧（从题目给定的上一次 revaluation的日期-此次
valuation的日期）
Depreciation expense – Machine A Dr 15 000
Accumulated depreciation Cr 15 000
(1/6 x 1/2 x $180 000)
Depreciation expense – Machine B Dr 15 500
Accumulated depreciation Cr 15 500
(1/5 x 1/2 x $155 000)
Step 2: 判断增减变动
Machine A $ Machine B $
Carrying amount 165 000 Carrying amount 139 500
Fair value 163 000 Fair value 136 500
Decrement 2 000 Decrement 3 000
Step 3:
关于Machine A
(1) Write-off Depreciation
Accumulated depreciation – Machine A Dr 15 000
Machine A Cr 15 000
(2) Revaluation downwards
Loss on devaluation – OCI Dr 2 000
Machine A Cr 2 000
(3) Tax-effect of revaluation decrement on asset previously
revalued upwards
Deferred tax liability Dr 600
Income tax expense (OCI) Cr 600
(4) Reduction in accumulated equity due to revaluation decrement
Asset revaluation surplus – Machine A Dr 1 400
Income tax expense (OCI) Dr 600
Loss on devaluation – OCI Cr 2 000
关于Machine B
(1) 消除折旧
Accumulated depreciation – Machine B Dr 15 500
Machine B Cr 15 500
(2) Writing down to fair value
Loss – revaluation decrement Dr 3 000
Machine B Cr 3 000
4. 其他重点习题 1
At 1 July 2014, Twister Ltd acquired the following non-current assets:
Equipment $100 000
Vehicles 80 000
They are in different classes of non-current assets and are to be measured at
fair value. The expected useful lives of vehicles and equipment are 5 years
and 10 years, respectively.
At 30 June 2015, the fair values of both assets were assessed. The equipment
had a fair value of $82 000, and the vehicles, $70 000. The remaining useful
lives were assessed to be 8 years for equipment and 7 years for vehicles.
At 30 June 2016, the fair value of equipment was assessed to be $81 750 and
the fair value of vehicles was $55 000.
Required
Prepare the journal entries for Twister Ltd for the years ending 30 June 2015
and 2016.
Twister Ltd
General Journal
30 June 2015
Depreciation expense – equipment Dr 10 000
Accumulated depreciation – equipment Cr 10 000
(Depreciation – $100 000 / 10 years)
Accumulated depreciation - equipment Dr 10 000
Equipment Cr 10 000
(Write down of equipment to carrying amount: $90 000)
Expense- write-down of equipment Dr 8 000
Equipment Cr 8 000
(Revaluation from carrying amount to fair value:
$90 000 to $82 000)
Depreciation expense – vehicles Dr 16 000
Accumulated depreciation – vehicles Cr 16 000
(Depreciation – 20% x $80 000)
Accumulated depreciation – vehicles Dr 16 000
Vehicles Cr 16 000
(Write-down to carrying amount: $64 000)
Vehicles Dr 6 000
Gain on revaluation of vehicles (OCI) Cr 6 000
(Revaluation increment: $64 000 to $70 000)
Income tax expense (OCI) Dr 1 800
Deferred tax liability Cr 1 800
(Tax effect of revaluation increment)
Gain on revaluation of vehicles (OCI) Dr 6 000
Income tax expense (OCI). Cr 1 800
Asset revaluation surplus - vehicles Cr 4 200
(Accumulation of net revaluation gain in equity)
30 June 2016
Depreciation Expense – Equipment Dr 10 250
Accumulated depreciation – Equipment Cr 10 250
(Depreciation – $82 000 / 8years)
Accumulated depreciation – Equipment Dr 10 250
Equipment Cr 10 250
(Write down from previous FV $82 000 to
carrying amount $71 750)
Equipment Dr 10 000
Gain on revaluation of equipment (P/L) Cr 8 000
Gain on revaluation of equipment (OCI) Cr 2 000
(Revaluation of equipment from $71 750 to $81 750,
with prior revaluation write-down of $8 000)
Income tax expense (OCI) Dr 600
Deferred tax liability Cr 600
(Tax effect of revaluation gain)
Gain on revaluation of equipment (OCI) Dr 2 000
Income tax expense (OCI) Cr 600
Asset revaluation surplus Cr 1 400
(Accumulation of revaluation gain in equity)
Depreciation expense – vehicles Dr 10 000
Accumulated Depreciation – vehicles Cr 10 000
(Being depreciation – $70 000 / 7 years)
Accumulated depreciation – vehicles Dr 10 000
Vehicles Cr 10 000
(Write down of vehicles to carrying amount
of $60 000)
Loss on revaluation of vehicles (OCI) Dr 5 000
Vehicles Cr 5 000
(Write down to fair value: $60 000 to $55 000)
Deferred tax liability Dr 1 500
Income tax expense (OCI) Cr 1 500
(Tax effect of write down to fair value)
Asset revaluation surplus Dr 3 500
Income tax expense (OCI) Dr 1 500
Loss on revaluation of vehicles (OCI) Cr 5 000
(Reduction in accumulated equity due to
revaluation decrement on vehicles)
5. 其他重点习题 2
On 30 June 2016, the statement of financial position of Miss Congeniality
Ltd showed the following non-current assets after charging depreciation:
Building
Accumulated
Depreciation
$ 300 000
(100 000) $200 000
Motor Vehicle
Accumulated
Depreciation
120 000
(40 000) 80 000
The company has adopted fair value for the valuation of non-current assets.
This has resulted in the recognition in previous periods of an asset
revaluation surplus for the building of $14 000. On 30 June 2016, an
independent valuer assessed the fair value of the building to be $160 000 and
the vehicle to be $90 000. The income tax rate is 30%.
Required
A.Prepare any necessary entries to revalue the building and the vehicle as at
30 June 2016.
B. Assume that the building and vehicle had remaining useful lives of 25
years and 4 years respectively, with zero residual value. Prepare entries
to record depreciation expense for the year ended 30 June 2017 using the
straight-line method.
A.
*NOTE: there is an amount of $14 000 in the asset revaluation surplus (ARS)
account for building from previous periods. This would have been recognised
from net revaluation gains to the building and can therefore be decreased with
any revaluation losses on building before those losses are required to be
recognised directly in the P&L. The amount in the ARS account is net of tax.
Therefore, the full amount of previous revaluation gains for the buildings
would have been $20 000 ($14 000 / 0.7). The tax amount would be recognised
in the Deferred Tax Liability account for $6 000.
30 June 2016
Accumulated depreciation – Building Dr 100 000
Building Cr 100 000
(Writing down to carrying amount)
Loss on revaluation of building (P&L) Dr 20 000
Loss on revaluation of building (OCI) Dr 20 000
Building Cr 40 000
(Revaluation downwards of building - *Note)
Deferred tax liability Dr 6 000
Income tax expense (OCI) Cr 6 000
(Tax-effect of revaluation decrement on
previously revalued asset - *Note)
Asset revaluation surplus - Building Dr 14 000
Income tax expense (OCI) Dr 6 000
Loss on revaluation of building (OCI) Cr 20 000
(Reduction in accumulated equity due to
revaluation decrement on building - *Note)
Accumulated depreciation – Vehicle Dr 40 000
Vehicle Cr 40 000
(Writing down to carrying amount)
Vehicle Dr 10 000
Gain on revaluation of vehicle (OCI) Cr 10 000
(Revaluation to fair value)
Income tax expense (OCI) Dr 3 000
Deferred tax liability Cr 3 000
(Tax-effect of revaluation increment)
Gain on revaluation of vehicle (OCI) Dr 10 000
Income tax expense (OCI) Cr 3 000
Asset revaluation surplus - vehicleCr 7 000
B.
30 June 2017
Depreciation expense – Building Dr 6 400
Accumulated depreciation – Building Cr 6 400
($160 000/25)
Depreciation expense – Vehicle Dr 22 500
Accumulated depreciation – Vehicle Cr 22 500
($90 000/ 4)
6. 其他重点习题 3
On 1 July 2016, Kingdom Ltd acquired two assets within the same class of
plant and equipment. Information on these assets is as follows:
Cost Expected useful life
Machine A
Machine B
$100 000
60 000
5 years
3 years
The machines are expected to generate benefits evenly over their useful lives.
The class of plant and equipment is measured using fair value.
At 30 June 2017, information about the assets is as follows:
Fair value Expected useful life
Machine A $84 000 4 years
Machine B 38 000 2 years
On 1 January 2018, Machine B was sold for $29 000 cash. On the same day,
Kingdom Ltd acquired Machine C for $80 000 cash. Machine C has an
expected useful life of 4 years. Kingdom Ltd also made a bonus issue of
10 000 shares at $1 per share, using $8000 from the general reserve and
$2000 from the asset revaluation surplus created as a result of measuring
Machine A at fair value.
At 30 June 2018, information on the machines is as follows:
Fair value Expected useful life
Machine A
Machine C
$61 000
68 500
3 years
1.5 years
The income tax rate is 30%.
Required
Prepare the journal entries in the records of Kingdom Ltd to record the
described events over the period 1 July 2016 to 30 June 2018, assuming
the ends of the reporting periods are 30 June 2017 and 30 June 2018.
1 July 2016
Machine A Dr 100 000
Machine B Dr 60 000
Cash Cr 160 000
30 June 2017
Depreciation expense – Machine A Dr 20 000
Accumulated depreciation Cr 20 000
(1/5 x $100 000)
Depreciation expense – Machine B Dr 20 000
Accumulated depreciation Cr 20 000
(1/3 x $60 000)
Accumulated depreciation- Machine A Dr 20 000
Machine A Cr 20 000
(Writing down to carrying amount)
Machine A Dr 4 000
Gain on revaluation of Machine A (OCI) Cr 4
000
(Revaluation increment: $80 000 to $84 000)
Income tax expense (OCI) Dr 1 200
Deferred tax liability Cr 1 200
(Tax effect of revaluation increment)
Gain on revaluation of Machine A (OCI) Dr 4 000
Income tax expense (OCI) Cr 1 200
Asset revaluation surplus – Machine A Cr 2
800
(Accumulation of net revaluation gain in equity))
Accumulated depreciation – Machine B Dr 20 000
Machine B Cr 20 000
(Writing down to carrying amount)
Expense – revaluation decrement (P&L) Dr 2 000
Machine B Cr 2 000
(Revaluation to fair value at 30/6/17)
1 January 2018
Machine C Dr 80 000
Cash Cr 80 000
(Acquisition of machine C)
Depreciation expense – Machine B Dr 9 500
Accumulated depreciation Cr 9 500
(($38 000 / 2years) x 1/2 year depn)
Cash Dr 29 000
Proceeds on sale of Machine B Cr 29 000
(Sale of Machine B)
Carrying amount of Machine B Sold Dr 28 500
Accumulated depreciation Dr 9 500
Machine B Cr 38 000
(Carrying amount of machine sold)
General reserve Dr 8 000
Asset revaluation surplus – Machine A Dr 2 000
Share Capital Cr 10 000
30 June 2018
Depreciation expense – Machine A Dr 21 000
Accumulated depreciation Cr 21 000
(1/4 x $84 000)
Depreciation expense – Machine C Dr 10 000
Accumulated depreciation Cr 10 000
(1/4 x ½ x $80 000)
Accumulated depreciation – Machine A Dr 21 000
Machine A Cr 21 000
(Writing down to carrying amount)
Loss on revaluation of Machine A (OCI) Dr 2 000
Machine A Cr 2 000
(Write down of plant from $63000 to $61000)
Deferred tax liability Dr 600
Income tax expense (OCI) Cr 600
(Tax-effect on downward revaluation
subsequent to upward revaluation)
*Asset revaluation surplus – Machine A Dr 800
Income tax expense (OCI) Dr 600
Loss on revaluation of Machine A(P&L) Dr 600
Loss on revaluation of Machine A (OCI) Cr 2
000
(Accumulation of revaluation loss to equity)
*Note: in the previous year the value of the ARS account from a revaluation
increment for Machine A was $2 800. However, the entity used $2 000 of this
surplus for a bonus share issue, leaving $800 balance in this account. Therefore,
when recognising a revaluation decrement for Machine A the ARS account can
only be reduced by the $800 remaining. The balance of the loss on revaluation
must now be recognised directly in P&L.
Accumulated depreciation – Machine C Dr 10 000
Machine C Cr 10 000
(Writing down to carrying amount)
Loss on revaluation (P&L) Dr 1 500
Machine C Cr 1 500
(Revaluation to fair value at 30/6/18)
Part 6 Share capital and reserves
1. 基本会计处理
1.1全额付款（Share issue fully payable on application）
Example 1：
On 1 July 2019, Epsilon Ltd issued a prospectus offering 80 000 ordinary shares, payable in full on
application at an issue price of $2. When applications closed on 13 August, applications had been
received for 110 000 shares. The directors allotted the shares on 15 August, and unsuccessful
applicants were given refunds.
Step 1: 收到认股款(application account)放入信托账户（Trust）
Dr: Cash Trust 2*110,000=220,000
Cr: Application 220,000
Step 2: 实际发行股份（allotment of shares）
(1)股票部分-从 Application(L)转入 Share Capital（E）
Dr: Application 80,000*2=160,000
Cr: Share capital 160,000
（2）认股款部分-将钱从临时账户（cash trust）转入公司自己的现金账户
Dr: Cash （与上一分录 share capital金额相同）160,000
Cr: Cash Trust 160,000
Step 3: Refund to unsuccessful applicants（退还超额认购款）
Dr: Application （Application临时剩余金额 balance，即 Step 1 减去 Step 2 中 Application金额）
220,000-160,000=60,000
Cr: Cash trust 60,000
1.2分期付款形式
• Temporary account: Application, second instalment (allotment), call
• Allotment/Call: Assets（cash receivable的性质）
• Issue the shares at price (eg. financial position)
情形 1: Allotment
Issue of shares: Deposit on application, balance on allotment
ABC issued a prospectus for the issue of 100,000 $5 shares on 1 January 2017. The prospectus
specified that $3 was payable on application, with the balance payable on allotment.
The company received applications for a total of 120,000 shares throughout the month of January.
The Directors refunded the money in relation to unsuccessful applications. On 31 January 2017 ABC
issued 100,000 shares.
Required:
Prepare the journal entries to account for the issue of shares by ABC.
Step 1: 收到认股款(application account)放入信托账户（Trust）
Dr: Cash Trust 3*120,000=360,000
Cr: Application 360,000
Step 2：处理实际发行股份
(1) 已发行股份中已收到认股款的部分：从 Application账户转入 share capital
Dr：Application 3*100,000 = 300,000
Cr：Share Capital 300,000
(2) 已发行股份中未收到认股款的部分，记入应收（Allotment）
Dr：Allotment 2*100,000 = 200,000
Cr: Share Capital 200,000
Note: 以上两笔分录可以合并为：
Dr：Application 300,000
Dr：Allotment 200,000
Cr: Share Capital 500,000
Step 3：处理钱
（1） 处理 Cash Trust中的钱
Dr：Cash 300,000（与 application转入 share capital中的金额一致）
Cr: Cash Trust 300,000
（2）收到相应的第二次分期缴款的认股款(Cash received on allotment)
Dr：Cash 200,000
Cr: Allotment 200,000
（3）退钱
Dr：Application 20,000 shares * 3 = 60,000
Cr：Cash Trust 60,000
情形 2: Call
ABC issued a prospectus for the issue of 100,000 $5 shares on 1 January 2017. The prospectus
specified that $2.50 was payable on application, a further $1.25 was payable on allotment and the
final $1.25 was payable at call. On 31 January 2017 ABC issued 100,000 shares.
On 31 May 2017, the company made the call for the outstanding balance of $1.25 per share. The
call was payable by 30 June 2017.
At 30 June 2017, the call on 10,000 shares remained unpaid.
Required:
Prepare the journal entries to account for the issue of shares for ABC.
Step 1: 收到认股款(application account)放入信托账户（Trust）
Dr: Cash Trust 2.5*100,000=250,000
Cr: Application 250,000
Step 2：处理实际发行股份
(3) 已发行股份中已收到认股款的部分：从 Application账户转入 share capital
Dr：Application 2.5*100,000 = 250,000
Cr：Share Capital 250,000
(4) 已发行股份中未收到认股款的部分，记入应收（Allotment）
Dr：Allotment 1.25*100,000 = 125,000
Cr: Share Capital 125,000
Note: 以上两笔分录可以合并为：
Dr：Application 250,000
Dr：Allotment 125,000
Cr: Share Capital 375,000
Step 3: 处理 Cash Trust中的钱
Dr：Cash 250,000（与 application转入 share capital中的金额一致）
Cr: Cash Trust 250,000
（2）收到相应的第二次分期缴款的认股款(Cash received on allotment)
Dr：Cash 125,000
Cr: Allotment 125,000
（3）退钱
N/A
Step 4: 召款-Call (应收认股款)
（1）发出召款通知:记入应收（call）
Dr Call 125,000（1.25*100,000）
$X/share was payable at call * number of shares
Cr Share capital 125,000
◼ Balance of Share Capital = 375,000 + 125,000 = 500,000
◼ Note: 题目中的表达 Call of $1.25 per share on 100,000 shares issued
（2）收到召款
Dr Cash 112,500 （100,000-10,000=90,000）* 1.25
Cr Call 112,500
Note: shares unpaid 10,000, shares paid = shares issued – shares unpaid
◼ Balance in the call account (未收到的召款) = 10,000 * 1.25 = 12,500
◼ Unpaid calls –> calls in arrears -> reduction of share capital
◼ calls in arrears 是 equity的抵消账户(Dr Equity)
Share capital (100,000 ordinary shares @ $5) 500,000
Less: Calls in arrears (10,000 shares @ $1.25) (12,500)
TOTAL SHARE CAPITAL 487,500
◼ Total equity = share capital – calls in arrears
1.3 Oversubscription (application申请认购金额 > shares offered)
2 choices for extra money:
选择 1: Refund
Dr: Application
Cr: Cash Trust (将 temporary账户剩余金额转出)
选择 2: Keep it for future payment
ABC issued a prospectus for 100,000 $5 shares on 1 January 2017.
The prospectus required payment of $3 on application and $2 in one years time. The company
received applications for a total of 125,000 shares – these applications were received throughout the
month of January.
On 31 January 2017 ABC issued 100,000 shares.
Assume on 1 Jan 2018, ABC issued a call and required the remain balance to be paid by 31 Jan. 2018.
On 31 Jan. 2018, the total balance on call were fully paid.
Required:
Prepare the journal entries to account for the issue of shares assuming the excess money was offset
against the call due in one years time.
Step 1: Get the application（收到认股申请）
Dr: Cash Trust 125,000*3=375,000
Cr: Application (share issue price * applicants认购股份的数量) 375,000
Step 2: 发行股份（issue shares）
（1）处理股份
Dr Application (与上一步 Cr金额相同) 375,000
Cr Calls in advance 75,000
Cr Share capital ($X/share payment on application * issuing number of shares)
3*100,000=300,000
（2）处理钱
原则：将 Step 1所有的钱从 cash trust转到 cash
Already give them shares (accept the application)—> keep the money —> all from cash trust to cash
Dr：Cash 375,000
Cr: Cash Trust 375,000
Step 3: 发出召款通知（Call）
Dr Call 2 * 100,000 = 200,000
Cr Share capital 200,000
Dr Call in advance（先对冲 step 2 的 call in advance账户）75,000
Cash （剩余的需要交钱） 125,000
Cr Call 200,000
1.4 Forfeited Shares （CR account）
Forfeiture: non-payment for part of the calls
发出召款通知（Call），但是有一部分 Call（receivable性质）没有被支付。
Example:
ABC issued a prospectus for the issue of 100,000 $5 shares on 1 January 2017. The prospectus
specified that $2.50 was payable on application, a further $1.25 was payable on allotment and the
final $1.25 was payable at call. On 31 January 2017 ABC issued 100,000 shares.
On 31 May 2017, the company made the call for the outstanding balance of $1.25 per share. The
call was payable by 30 June 2017.
At 30 June 2017, the call on 10,000 shares remained unpaid.
以下关于废除股份：
• On 1 July 2017 the directors of ABC decided to forfeit the 10,000 shares in respect of which the
call of $1.25 was not made.
• The shares were cancelled and reissued as fully paid to $5 per share on payment of $4 per share.
• Costs of $500 were incurred to reissue the shares.
Required:
Prepare the journal entries to account for the forfeiture and re issue of the 10,000 shares.
Step 1：废除股份
Dr Share capital 10,000 * 5 = 50,000
(Forfeited Shares number废除股份数量*已经有支付义务的每股单价)
Cr Call (unpaid) 10,000*1.25=12,500
Cr Forfeited shares a/c XX (倒挤) 37,500
Step 2：Re-issue of forfeited shares
Two options，如何处理上一步的 forfeited shares（关注 Forfeited shares在对于废除股份处理
的不同情况下的账户性质）
 情况 1: cancel the shares and keep this money for reissuing: forfeited shares 属于 reserve
（equity） account
Re-issue 的 Reason: top up the share capital to the original-将股本金恢复到原有水平（不减
资）
 情况 2: cancel the shares and refund the money: forfeited shares 属于 liability
针对情况 1（Keep the money for reissuing）
再分溢价发行（issue at premium）和折价发行（issue at discount）两种情况：
(1) Issue the shares at premium
Dr: Cash
Cr: share capital (reissue share price * number of shares)
Dr: Forfeited shares （金额与 step 1里 forfeited shares相同）
Cr: cash
(2) Issue the shares at discount (fully paid reissue share price > actual payment)
需要对于 Forfeited Shares做 Deduction（全部做在 Dr）
 Step 1: shares reissue 分录
Dr: Cash (actual payment of $X per share * number of shares) 4*10,000=40,000
Dr: Forfeited shares 10,000
Cr: share capital (fully paid reissue share price * number of shares)
5 * 10,000 = 50,000
 Step 2: 针对 reissue cost，对于 Forfeited shares（CR reserve and equity）account
Dr: Forfeited shares 500
Cr: Cash 500
 Step 3: 将 forfeited shares的剩余 balance，refund给股东
Dr：Forfeited Shares 37,500-10,000-500=27,000
Cr：Cash 27,000
Where the constitution is silent, the company is entitled to keep any excess (Forfeited Share
Reserve).
1.5 Share issue costs and formation cost的会计处理
(1) Distinguish the two types of cost
 Formation cost: Costs even before you start the operation (maybe non-related to IPO)-
Expense 性质
Dr： Preliminary expenses
Cr：Cash
 Underwriting costs:计入 share capital deduction
Dr：Share issue cost （share capital）
Cr：Cash
Eg. stamp duty, legal fees
Note: Underwriter agrees to purchase all excess shares in return for an upfront payment of an
underwriting commission
(2) Share capital 计算公式
 Total capital = share capital – calls in arrears + calls in advance – underwriting
commission – share issue costs
1.6 Private Placement (私募发行)的会计处理
Dr： Cash
Cr：Share Capital
1.7 Bonus Issues的会计处理
Dr Retained earnings OR reserve xx
Cr Share capital xx
1.8 Share Option的会计处理
(1) Option基本概念
有权利在特定时间以特定价格购买特定数量的股份
In money: market price > exercise price
Out of money: market price < exercise price
(2) Option的性质
Option:
Exercise: option 转为 Share capital (执行期权)
Lapses: reserve account（未行权）
(3) Shares Option
Example：In February 2019, Sigma Ltd issued to existing shareholders 36000 options to buy 36000
ordinary shares. Each option costs 50c and entitles the holder to one ordinary share in Sigma Ltd at a
price of $1.50 per share, exercisable between 23 November 2021 and 20 December 2021. Options not
exercised by 20 December 2021 will lapse.
By 20 December 2021, 30 000 options were exercised and shares were issued in accordance with the
agreement. The remaining 6000 options lapsed. On the exercise of the options, the company makes
the following entries:
◼ Step 1 : Issue the options (发行股份)
Dr: Cash 50c * 36,000 = 18,000
Cr: Share Options (Each option costs $X * number of options) 18,000
Note：Share Options作为临时账户（Equity）
◼ Step 2: Execute the options (执行期权-发行股份)
Dr: Cash 30,000*1.5=45,000
Cr: Share Capital (execute share price * number of options that were executed)
45,000
◼ Step 3: Write-off of the remaining share options (期权过期后注销)
Dr: Share Options 18,000
Cr: Share Capital 15,000
(50c*30,000=15,000)
Cr: Lapsed Option 50c*6,000 = 3,000