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  1. avatar says

    Hi mr mike . i want ask about revaluation assets in consolidation F S

    On 1 January 20X7 Hardy owned some items of equipment with a book value of $45,000 that had a fairvalue of $57,000. These assets were originally purchased by Hardy on 1 January 20X5 and are being
    depreciated over 6 years.
    hardly is subsidery
    i know 12000 revaluation will put in GW calculation and TNCA in CoFS completly .
    but i dont know how can i deal with dep in CoRE and TNCA
    please help

  2. avatar says

    Dear Mr Mike

    1.Why would you not deduct the extra depreciation of 12 from the groups retained earnings especially if they have not been accounted for by the subsidiary.
    Would it not be prudent to account for the depreciation expense due to FV adjustment.
    2. If there is a FV adjustment in the subsidiary then should we not create a revaluation reserve when consolidating and decrease it by the excess depreciation.
    Hope for a reply!

    Much obliged

    • Avatar of MikeLittle says

      IF I’m on the correct question, is the extra depreciation not 9 (36 / 4)

      The 9 IS accounted for by reducing the selling company’s retained earnings by the NET pup (if I’m on the correct question)

      I suppose it depends what the fair value adjustment relates to. Yes, I could see the argument that says it’s a revaluation. Frankly, I’m not so sure that it matters whether you include it within retained earnings or show it separately as a revaluation reserve

  3. avatar says

    apart from learning the drill of 4 workings
    there are also things to learn which are based on accounts knowledge
    but you did not cover all of them, and left to students effort.
    Am i right. and u want to practice us to do.?

    • Avatar of MikeLittle says

      Yes, that’s it. You can find the figure for pre-acq, when preparing W3 Cons Ret Ears, by looking in W2 Goodwill. The FV of SNA @ DOA in W2 comprises S’s share capital, share premium and (basically) retained earnings as adjusted for fair value adjustments.

      The thing you must be careful about, though, is that you don’t pick up for the pre-acq figure the full fair value SNA. The figure you need for W3 is just the Retained Earnings figure as adjusted for the fair value changes

      Is that clear?

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