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Fair value adjustmentIFRS 3 requires that goodwill on consolidation should be based on the fair values of the net assets of the subsidiary company on the date of acquisition.This means that the subsidiary company should revalue its assets on the date of acquisition.But unfortunately no revaluation may have been done. For the purpose of consolidation, it is important to determine what should have been the revaluation gain or loss if an asset is revalued. In most cases we revalue non current assets such as Property, plan nd equipment, intangible assets and long term investments. If there is a revaluation gain on any of the assets then the following entry will be made:a) To record the revaluation gain
DR. Group PPE/intangible assets/Longterm investments (with the full revaluation gain) CR. Cost of control (with holding company share of revaluation gain) CR. M.I (with M.I’s share of the revaluation gain)For assets that are meant to be depreciated or amortized, (PPE and Intangibles), the total depreciation or amortization that should be charged to date should be estimated and provided for .b) Compute the additional depreciation that should have been provided to date had the subsidiaries assets been revalued and record the amount as follows;
DR. Group retained profits (with holding company share of additional depreciation)DR. M.I (with M.I’s share of additional depreciation) CR. Group PPE/Intangible assets (with the full additional depreciation)
Pre-acquisition losses in subsidiary company on date of acquisition If the subsidiary company has a loss on the date of acquisition i.e. a debit balance in the retained profits
Assuming the robot is placed on track at the packing station facing away from the station) the robot traverses the entire track. During this step, the robot will follow a left-hand
Heathrow issues $2,000,000 of 6%, 15-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $2,447,990.
EXPLIN THE PROCEDURE FOLLOWED IN GOVERMENT SYSTEM OF ACCOUNTING IN INDIA.
On April 10, ABC inc. Enters in a swap contract for 10 years with a chartered bank to turn a fixed rate on liability of $150 million to floating rate. ABC wants to receive interest
Materials used by Company X in producing Division A's product are currently purchased from outside suppliers at a cost of $30 per unit. But the same materials are available from Di
1.) Assume a $1000 face value bond has a coupon rate of 8.5 percent, pays interest semi-annually, and has an eight-year life. If investors are willing to accept a 10.25 percent rat
On June 30, 2011, Omara Co. had outstanding 8%, $3,000,000 face amount, 15-year bonds maturing on June 30, 2021. Interest is payable on June 30 and December 31. The unamortized bal
How is Accounting information useful to A prospective Investor?
IFRS guidelines IFRSs Gives the guideline on the content and the accounting statements of certain events and transactions in the financial statements. The following IFRSs are r
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