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Explore and get acquainted with the trading dashboard. Deposit fiat into your trading account. Invest and trade in stocks that you want in your portfolio. Open a Free Trading Account. Table of Contents. Trade with a Regulated Broker. Follow Us [saswp-reviews-form]. Min Deposit. Official Site. Visit Broker. User Score. Sign Up. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits.
However, you may visit "Cookie Settings" to provide a controlled consent. Cookie Settings Accept All. Manage consent. Close Privacy Overview This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. A Volume-Weighted Moving Average is the same, except that it gives a different weight to each closing price.
And this weight depends on the volume of that period. For instance, the closing price of a day with high volume will have a greater weight on a daily chart. A moving average is a versatile tool. The tactics above are reasonable for most moving averages. But they miss the point of the VWMA because they do not make use of its unique integration with volume data.
An SMA does not include volume weighting. The SMA is a benchmark. By doing so, we ensure that the only difference between the two moving averages is volume weighting. Their difference highlights the effect of volume weighting.
As mentioned, both moving averages must be set to the same look-back period. Here, both are using period as their look-back parameter. Most moving averages issue reversal warnings through crossovers.
However, as moving averages are lagging indicators, they do only after the market has reversed. In comparison, here, combining the two moving averages led to an impressive early signal.
It managed to warn us while the bull market looked intact, even before the sideways congestion began. It shows how the divergence between price and volume presents a trading opportunity. From a price action perspective, there was a lack of bullish streaks within the sideways consolidation. This supported the bearish volume backdrop. As you can see, the VWMA is useful for tracking the price-volume context.
However, it does not trigger a trade. Reassessed as to the accuracy of its measurement and then recognized in retained earnings. Carried as a capital reserve indefinitely. Adapted 9. Step acquisition c. Reverse acquisition b. Rewind acquisition d. Stock acquisition Acquisition accounting requires an acquirer and an acquiree to be identified for every business combination.
Where a new entity H is created to acquire two preexisting entities, S and A, which of these entities will be designated as the acquirer? Adapted The aggregate cash flows arising from acquisitions and from disposals of subsidiaries or other business units resulting to loss or obtaining of control are presented separately and classified as a. Operating activities c. Financing activities b. Investing activities d. Disclosed only Cash flows arising from changes in ownership interests in a subsidiary that do not result in a loss of control are classified as cash flows from a.
Which of the following accounting methods must be applied to all business combinations under PFRS 3 Business Combinations? Pooling of interests method. Acquisition method. Equity method. Purchase method. On January 1, 20x1, the directors considered that realization of the deferred tax assets were not probable. There would be no effect on goodwill.
A parent entity is acquiring a majority holding in an entity whose shares are dealt in on a recognized market. Under PFRS 3 Business Combinations, which of the following measurement bases may be used in measuring the non-controlling interest at the acquisition date? The nominal value of the shares in the acquiree not acquired II. The fair value of the shares in the acquiree not acquired III. The non-controlling interest in the acquiree's assets and liabilities at book value IV.
The non-controlling interest in the acquiree's assets and liabilities at fair value a. II only b. II and IV d. IV only Adapted True, True Adapted PFRS 3 requires all identifiable intangible assets of the acquired business to be recorded at their fair values. Many intangible assets that may have been subsumed within goodwill must be now separately valued and identified. When it meets the definition of an asset in the Conceptual Framework document only. When it meets the definition of an intangible asset in PAS 38, Intangible Assets, and its fair value can be measured reliably.
If it has been recognized under local generally accepted accounting principles even though it does not meet the definition in PAS Where it has been acquired in a business combination. Which of the following examples is unlikely to meet the definition of an intangible asset for the purpose of PFRS 3? Marketing related, such as trademarks and internet domain names. Customer related, such as customer lists and contracts. Technology based, such as computer software and databases.
Pure research based, such as general expenditure on research. An intangible asset with an indefinite life is one where a. There is no foreseeable limit on the period over which the asset will generate cash flows. The length of life is over 20 years. The directors feel that the intangible asset will not lose value in the foreseeable future. There is a contractual or legal arrangement that lasts for a period in excess of five years. An intangible asset with an indefinite life is accounted for as follows: a.
No amortization but annual impairment test. Amortized and impairment tests annually. Amortized and no impairment test. An acquirer should at the acquisition date recognize goodwill acquired in a business combination as an asset.
Goodwill should be accounted for as follows: a. Recognize as an intangible asset and amortize over its useful life. Write off against retained earnings. Recognize as an intangible asset and impairment test when a trigger event occurs.
Recognize as an intangible asset and annually impairment test or more frequently if impairment is indicated. If the impairment of the value of goodwill is seen to have reversed, then the company may a. Reverse the impairment charge and credit income for the period. Reverse the impairment charge and credit retained earnings. Not reverse the impairment charge. Reverse the impairment charge only if the original circumstances that led to the impairment no longer exist and credit retained earnings.
On acquisition, all identifiable assets and liabilities, including goodwill, will be allocated to cash-generating units within the business combination. Goodwill impairment is assessed within the cash-generating units. If the combined organization has cash- generating units significantly below the level of an operating segment, then the risk of an impairment charge against goodwill as a result of PFRS 3 is a. Significantly decreased because goodwill will be spread across many cash-generating units.
Significantly increased because poorly performing units can no longer be supported by those that are performing well. Likely to be unchanged from previous accounting practice. Likely to be decreased because goodwill will be a smaller amount due to the greater recognition of other intangible assets. The management of an entity is unsure how to treat a restructuring provision that they wish to set up on the acquisition of another entity.
Under PFRS 3, the treatment of this provision will be a. A charge in the income statement in the postacquisition period. To include the provision in the allocated cost of acquisition. To provide for the amount and, if the provision is overstated, to release the excess to the income statement in the postacquisition period. To include the provision in the allocated cost of acquisition if the acquired entity commits itself to a restructuring within a year of acquisition.
When should MIME perform its second impairment testing on its goodwill? For purposes of impairment testing, PAS 36 a. By December 31, 20x1, the initial allocation of goodwill is not yet completed. Which of the following is incorrect regarding the accounting for business combinations in accordance with PFRSs?
If allocation is incomplete prior to the end of the year of acquisition, the allocation should be completed prior to the end of the immediately preceding year.
PFRS 3 requires the use of the acquisition method in accounting for business combination. Goodwill is computed as the difference between the consideration transferred and the acquisition-date fair value of net identifiable assets acquired. In applying the acquisition method, PFRS 3 requires that the acquirer should be identified. Goodwill must not be amortized under PFRS 3.
The transitional rules do not require restatement of previous balances written off. Those acquisitions selected by the entity. All acquisitions from the date of the earliest. Only past and present acquisitions of entities that have previously and currently prepared their financial statements using PFRS.
PFRS 3 is mandatory for all new acquisitions from March 31, Entities have to cease the amortization of goodwill arising from previous acquisitions. The balance of goodwill arising from those acquisitions is a. Written off against retained earnings. Written off against profit or loss for the year.
Tested for impairment from the beginning of the next accounting year. Tested for impairment on March 31, Which of the following factors is used as multiplier of super profits in valuation of goodwill of a business? Average capital employed in the business d. Normal rate of return b. Simple profits e. Normal profits. The financial statements of ABC Co. XYZ, Inc. Cash 40, 20, Accounts receivable , 48, Inventory , 92, Equipment , , Accumulated depreciation 80, 40, Total assets 1,, , Accounts payable 80, 24, Bonds payable , - Share capital , , Share premium , - Retained earnings , 96, Total liabilities and equity 1,, , On January 1, 20x1, the fair value of the assets and liabilities of XYZ, Inc.
How much is the consolidated total assets as of January 1, 20x1? How much is the consolidated total equity as of January 1, 20x1? On acquisition date, ABC Co. There were also no inter-company transactions. The group determined that there is no goodwill impairment. How much is the consolidated profit for 20x1? How much is the consolidated total assets as of December 31, 20x1? How much is the consolidated total equity as of December 31, 20x1? The following information was determined at acquisition date: Popo Momo Momo Co.
Carryin Carryin g g Fair amount amount value 4,,00 2,,00 1,,0 Equipment 0 0 00 Accumulated ,00 , ,0 depreciation 0 00 3,,00 1,,00 1,,0 Net 0 0 00 Remaining useful life — Jan. On January 1, 20x1, Donkey Co. The equipment has a remaining useful life of 10 years. Owl elected to value NCI at fair value. A summary of the individual statements of financial positions of the entities as at the end of reporting period is shown below: Owlet Owl Co.
How much is the fair value assigned to NCI at date of acquisition? How much is the goodwill to be presented in the current-year consolidated financial statements? How much is the NCI in net assets? How much is the consolidated retained earnings? How much is the consolidated total assets? How much is the consolidated total equity? A quarter of these goods remain unsold at year-end.
The individual statements of profit or loss and other comprehensive income of the entities for the year ended December 31, 20x1 are shown below: Rooster Cockerel Co. Revenue 4,, 2,, Cost of sales 1,, 1,, Gross profit 2,, 1,, Dividend income from Cockerel Co. How much is the consolidated sales?
How much is the consolidated cost of sales? How much is the consolidated profit? How much is the consolidated comprehensive income? How much is the profit attributable to owners of the parent and NCI, respectively? Owners of Parent NCI a.
How much is the comprehensive income attributable to owners of the parent and NCI, respectively? One- third of these goods remain unsold at year-end. The group assessed that there is no impairment loss on goodwill for the current year. The individual statements of profit or loss of the entities for the year ended December 31, 20x1 are shown below: Pig Co.
Piglet Co. Bear Co. Cub Co. Neither company declared dividends. There are 3-year dividends in arrears on the outstanding cumulative preference shares of Cub Co. It was assessed that goodwill is not impaired. Goodwill has been computed under each of the available options under PFRS 3 as follows: Case 1 Case 2 proportionate fair value 1 Consideration transferred , , 2 Non-controlling interest 72, 75, in the acquiree 3 Previously held equity - - interest in the acquire Total , , Fair value of net identifiable assets , , acquired Goodwill 12, 15, As of December 31, 20x1, XYZ, Inc.
There has been no impairment of goodwill. The remaining investment in XYZ, Inc. Subsequent to acquisition date, XYZ, Inc. How much is the gain or loss on disposal of controlling interest to be recognized in profit or loss? The following information was determined immediately before the acquisition: Dad Co.
Son Co. How much is the total assets in the consolidated financial statements? Nymph uses the cost model for its investment properties. However, the group's policy for investment properties is the fair value model. The building's remaining useful life is 5 years at that date. The group's depreciation method is straight-line basis. A summary of the individual statements of financial positions of the entities as at June 30, 20x3 is shown below: Cockroach Nymph Co.
How much is the goodwill to be presented in the June 30, 20x3 consolidated financial statements? The group determined on Dec. A summary of the individual statements of financial positions of the entities as at December 31, 20x3 is shown below: Rabbit Bunny Co. How much is the goodwill to be presented in the December 31, 20x3 consolidated financial statements?
There were no inter-company transactions during the year. How much is the profit of Lamb for the year ended December 31, 20x1? How much is the profit attributable to owners of the parent and to NCI, respectively? Parent NCI a. Peter Co. One- third of the inventory remains as of Dec. One-half of the goods remain in inventory as of December 31, 20x1. The interest income accruing on the bonds for the year was received by Simon from Peter. The individual financial statements of the entities at December 31, 20x1 are shown below: Statements of financial position As at December 31, 20x1 Peter Co.
Simon Co. How much is the consolidated ending inventory? How much is the goodwill in the December 31, 20x1 consolidated financial statements?
How much is the NCI in net assets as of December 31, 20x1? How much is the consolidated retained earnings as of December 31, 20x1? How much is the consolidated profit or loss in 20x1? How much are the profit attributable to the owners of the parent and to NCI, respectively? Owners of parent NCI a. How much is the total consolidated assets as of December 31, 20x1? How much is the total consolidated liabilities as of December 31, 20x1?
The fair value of Big Co. The statements of financial position of the combining entities immediately before combination show the following information: Small Co.
Big Co. Case 1: Refer to fact pattern All of Big Co. How much is the consolidated total share capital? How much is the consolidated total retained earnings?
What is the acquisition date? When is goodwill computed? The carrying amounts of the net identifiable assets of S1 and S2 approximate their fair values on January 1, 20x1. There have been no changes in the share capitals of S1 and S2 during the year. A summary of the individual financial statements of the entities is shown below: Statements of financial position As at December 31, 20x1 P S1 S2 ,0 ,0 Investment in Subsidiary 00 00 - ,0 ,0 ,0 Other assets 00 00 00 1,, , , Total assets Liabilities , , 8, Share capital , , , Retained earnings , , , Total liabilities and 1,, , , equity Statements of profit or loss For the year ended December 31, 20x1 , , ,0 Revenues 00 , ,0 ,0 Expenses 00 00 88, 72, Profit , 6.
How much is the goodwill as of December 31, 20x1? How much is the total NCI in net assets as of December 31, 20x1? How much is the profit attributable to owners of parent and to NCI, respectively? How much is the total goodwill as of December 31, 20x1? How much are the profit attributable to owners of parent and to the NCIs? The group determined on December 31, 20x1 that there is no impairment of goodwill. The group determined on December 31, 20x1 that there is no impairment in goodwill.
Statements of profit or loss For the year ended December 31, 20x1 A B C D E Reven ,0 ,0 ,0 ,0 ,0 ues 00 00 00 00 00 Expen ,0 ,0 ,0 ,0 80,0 ses 00 00 00 00 00 Profi ,0 88,00 72,00 32,00 48,0 t 00 0 0 0 00 Profits do not include income from investments.
Assuming the existence of control is based solely on shareholdings, which of the entities above are considered subsidiaries of A Co.? B only d. The accounting for business combinations is currently prescribed under a.
PAS 22 c. PFRS 3 — revised b. PFRS 3 d. PAS 27 — revised 2. KINK Co. The investment in the subsidiary has been classified as held for sale and is to be accounted for in accordance with PFRS 5.
The subsidiary has never been consolidated. How should the investment in the subsidiary be treated in the financial statements? Purchase accounting should be used. Equity accounting should be used. The subsidiary should not be consolidated but PFRS 5 should be used.
The subsidiary should remain off balance sheet. Adapted 3. The consolidation theory currently applied under PFRSs is a. Parent company theory c.
The proprietary theory is applied under which of the following standards? PAS 31 b. PAS 36 c. PFRS 3d. PAS 27 5. What is the basis for consolidation? Because of exchange controls, it is difficult to transfer funds out of the country to the parent entity. It should be excluded from consolidation and the equity method should be used.
It should be excluded from consolidation and stated at cost. It should be excluded from consolidation and accounted for in accordance with PFRS 9. It is not permitted to be excluded from consolidation because control is not lost.
Adapted 7. TIPPLE cannot exercise control because it can control only the makeup of the board and not necessarily the way the directors vote. For financial reporting purposes, which of the following statements is correct? Goodwill shall be computed on July 1, 20x4 and the one-third equity interest acquired in 20x1 does not affect the goodwill computation.
Goodwill shall be computed on July 1, 20x4 and the one-third equity interest acquired in 20x1 affects the goodwill computation. Goodwill shall be computed only on January 1, 20x1. The subsequent change in ownership interest which did not result to loss of control is accounted for directly in equity. No, control can be exercised only through voting power, not through a casting vote.
The company was formerly a state-owned entity. The national regulator has retained the power to appoint the board of directors. Who has control of the entity? The national regulator. The overseas entity.
Neither the national regulator nor the overseas entity. The board of directors. A manufacturing group has just acquired a controlling interest in a football club that is listed on a stock exchange. The management of the manufacturing group wishes to exclude the football club from the consolidated financial statements on the grounds that its activities are dissimilar. How should the football club be accounted for? The entity should be consolidated as there is no exemption from consolidation on the grounds of dissimilar activities.
The entity should not be consolidated using the purchase method but should be consolidated using equity accounting. The entity should not be consolidated and should appear as an investment in the group accounts. The entity should not be consolidated; details should be disclosed in the financial statements.
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