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i have a doubt for when calculating part the disposal ,the value of net assets is adjusted to the date of disposal..comparing these 2 questions why have we added a fair value adjustment of 14 to nathan’s NA in merchant(june 2014) but not added fair value adjustment of 4 to fences’s NA in grange question(dec2009)
I think the treatment is actually the same:
Sale of 8% interest in Nathan (Merchant):
8%*(120 (per quest) + 14 fv adj + 12 g/w)= 11.68
Compared to 18 consideration, it gives an adj to p’s equity of 6.32Sale of 25% interst in Fence (Grange):
25%*(232 (per quest) + -21,53 fv adj + 8 g/w) = 54.62
Compared to 80 consideration, it gives an adj to p’s equity of 25.38The -21.53 fv adj includes the 4 fv adj, the corresponding depreciation and the conting liab of 30 subsequentely revised to 25.
I would encourage you to post this kind of questions in the P2 Ask the Tutor forum going forward.
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