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- This topic has 10 replies, 3 voices, and was last updated 8 years ago by MikeLittle.
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- October 5, 2015 at 10:52 pm #275096
Hello Sir,
How are you? I need to ask that why loan notes is deducted or added to Parents Investment and how we deal loan notes in CSFP?October 6, 2015 at 1:14 pm #275166It’s value being given by the acquirer to the former shareholders of the acquiree in the form of a promise to pay money at some time in the future
How to deal with it? The double entry in the parent’s records will be Dr Cost of Acquisition and Cr Long Term Liability
The Cost of Acquisition Account leads us to the figure for Goodwill and the long term liability account is shown in Long Term Liabilities on the consolidated statement of financial position
OK?
October 6, 2015 at 5:51 pm #275238Hello sir you mean that the cost of acquisition is treated as an Asset by Parent in CSFP and it is also added to Parents investment in this case? what is the adjustment in CSFP when we treat this in our working.
October 6, 2015 at 6:00 pm #275241Cost of Acquisition is the account in the parent company records but, as with all the examples from the course notes, cost of acquisition in the course notes from Vytautas and Gediminas onwards is dropped from the scene when we start the consolidation exercise
However, we do need to know the cost of acquisition in order that we can calculate goodwill in working W2
OK?
October 8, 2015 at 10:37 am #275514I benefited from you explanation here Mr. MikelLittle. So I am saying thank you.
And also to Bilaliqbal, thanks for bringing this up too.
October 8, 2015 at 11:10 am #275517You’re both welcome
October 8, 2015 at 6:24 pm #275576Hello Sir How are you? I need to ask that we just deal this in the working of cost investment to calculate goodwill and we do not deal it in CSFP when we do a combination of two group Financial Statements ?
October 8, 2015 at 6:25 pm #275577And you are welcome Samuel Bro 🙂
October 8, 2015 at 6:53 pm #275581Hi Bilal
You are correct – the only time that we are interested is for working W2 Goodwill
October 8, 2015 at 7:01 pm #275585Ok Sir Mike 🙂 Thanks a lot 🙂 I will be keep in touch If I face any more trouble.
RegardsOctober 8, 2015 at 7:08 pm #275586You’re welcome
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