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any information obtained which effects the circumstances present at acquisition date as they existed at acquisition date should account for retrospectively.This further information must be obtained with in 12 months of date of acquisition.
ASSETS/LIABILITIES
remeasued
movement recognised in P/L
EQUITY
Dr retained earnings
Cr share capital/share premium
not remeasured
the measurement period does not end more then 12 months
sir please explain this me simply so i can clear concept of this i will be thankfull for help please sirIf you have copied this, then you have copied it inaccurately because it doesn’t make sense.
I think that what it is trying to say is this:
At date of acquisition, some fair values are not capable of precise / accurate calculation so reasonable estimates will be made. As time passes, those estimates become more clear and adjustments are then available to be made to the original values included as at date of acquisition.
On the anniversary of the take-over, the acquirer shall look at the fair values attributed to the net assets as at one year earlier and make adjustments as necessary to reflect fairer values. Those adjustment will affect statement of profit or loss / retained earnings
Any information obtained more than twelve months after the acquisition is NOT used for making adjustment to the values as at date of acquisition
Does that resolve your query?
sir then the fair value of net assets at acquisition after adjustment due to clear in estimates are used in goodwill calculation and for calulation of post acquisition increase in net asset (which is then allocate to NCI and GROUP) sir is i am correct or not
I’m not sure that you are correct! Any adjustments within that twelve month period following acquisition do not affect the goodwill! The entry is to debit or credit the asset or liability as appropriate with the other entry going through statement of profit or loss and thus into retained earnings
Is that what you meant?
no sir i am asking of the parent share in post acquisition net assets
post acqiusition net assets = difference between fair value of net assets of subsidiary at acquisition (adjusted) and at reportingSyed, using my method I look at the reserves as at reporting date and deduct the reserves as at acquisition date (Kaplan and BPP tackle this in their own way!)
Having arrived at that difference, you are correct that the parent is allocated their percentage share of that post-acquisition movement and the nci is allocated their share.
If that’s what you meant then I agree with you
Ok now?
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