Because share premium arises on the issue of shares and, in F7 ( and probably also in P2 ) there WILL NOT BE a share issue post acquisition by the subsidiary
Why do we not have share premium in subsidary incorporated into CS of FP?Beacause it was formed before acquisition?what’s the treatment for new share premium,that is generated by subsidary issuing new share after acquisition?
@ginduja21, because it’s like a “profit” – it’s called a bargain purchase. We USED to have a complicated way of crediting negative goodwill to the retained earnings over a number of years, but that method has now gone.
um, what happened to the media player? it was fine yesterday, how come its shrunk now? cant even view it on full screen..
Pls how did he get the 23,500 as the pre acquisition in working 3 of question RObertas and INgrida
Thanks. Have figured it out
How do we figure out if the 1500 wasn’t pre acq. share prm.?
Because share premium arises on the issue of shares and, in F7 ( and probably also in P2 ) there WILL NOT BE a share issue post acquisition by the subsidiary
Why do we not have share premium in subsidary incorporated into CS of FP?Beacause it was formed before acquisition?what’s the treatment for new share premium,that is generated by subsidary issuing new share after acquisition?
Example 10
It won’t happen! ABSOLUTELY NOT at F7 and most probably not at P2 either
Where in the Balance Sheet do you add the Fair Value Adjustment (20,000)?
To whichever asset ( or liability ) which was the subject of the fair value adjustment – so long as it’s still in the possession of the group
why we have to add 6000 (goodwill) to retained earnings?
@ginduja21, because it’s like a “profit” – it’s called a bargain purchase. We USED to have a complicated way of crediting negative goodwill to the retained earnings over a number of years, but that method has now gone.
what is the wrong if i apply the goodwill in negative value?
@ginduja21, Hi
I’m not sure what your question is! Can you re-post and make it a bit clearer?
How did that 25% of 28000 come from? I got the point about 25% but 28000 figure? Is it from FV of SNA @DOA???!!!
@s1234, yes its the SNA @ DOA…..25%* [3000+1500+20000+(7/12 * 6000)]