FAIR VALUE

This topic contains 5 replies, has 4 voices, and was last updated by Avatar of MikeLittle MikeLittle 1 year ago. This post has been viewed 66 times

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    rania
    Participant
    • Topics: 22
    • Replies: 18

    what does TRANSFERRING A LIABILITY means?


    Avatar of MikeLittle
    MikeLittle
    Keymaster
    • Topics: 0
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    It means that you have a liability and ………. you transfer it!

    When someone buys your business from you, a sole trader, you will transfer all your assets and liabilities to the person buying your business


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    tengyee
    Participant
    • Topics: 3
    • Replies: 9

    Hi,
    The following information was given. (Finance lease)
    Deposit (non-refundable) $1150
    Cash price $20000
    Installment $4000 pa for 7years payable in arrears
    Discount rate 11%
    What would be the fair value?


    Avatar of MikeLittle
    MikeLittle
    Keymaster
    • Topics: 0
    • Replies: 5572

    I don’t know – are you expecting me to do the present value calculations?

    Calculate that present value, compare it with $20,000, and whichever is the lower then that’s the fair value


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    hasanali95
    Participant
    • Topics: 184
    • Replies: 242

    Sir in the CSOCI where do we take fair value adjustments?like there is a property revaluation and additional depreciation in subsidiary so do we adjust it under Cost of sales and the dep in admin exp?


    Avatar of MikeLittle
    MikeLittle
    Keymaster
    • Topics: 0
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    Why would property revaluation be in cost of sales?

    Fair value adjustment would be dealt with as part of the goodwill calculation taking the acquired assets at their fair value. So TNCA in the Consol B/S would be increased by the fair value adjustment, net of the depreciation since acquisition. That depreciation itself would be included within the consolidated Income Statement – maybe as a cost of sale, maybe as admin or it could even be included within distribution costs if the revalued asset were sales personnel cars

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