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BPP revision kit: page 31: Q105
– P acquired S on 1st April 2008
– Consolidated RE to be calculated for the year ended 30 September 2008.
– At acquisition date fair value of a depreciable non-current asset was 2m in excess of its carrying amount. remaining life at date of acquisition is 5 years (straight-line method).My question is:
When calculating the consolidated retained earnings i get 18,000 for fair value adjustment of this asset. ((2m minus (2m/5 multiplied by 0.5)). However in the answer the fair value adjustment shows only 200, which is the depreciated amount before acquisition.
In ur notes chapter7: Q11 you took the fair value remaining after depreciation, but in this answer they have used the depreciation amount itself. Please explain.“BPP revision kit: page 31: Q105”
This detail is of no use at all to me
What’s the name of the question (or even the examination reference – like December 2009)
i do not know which year it is.
Highveldt is the question nameim doing from this version
FOR EXAMS IN SEPTEMBER 2016, DECEMBER 2016, MARCH 2017 AND JUNE 2017 bookcan you also explain the fair value adjustments made in consolidated retained earnings workings.
“Highveldt is the question name”
THAT’S WHAT I WANTED!!!!
“im doing from this version FOR EXAMS IN SEPTEMBER 2016, DECEMBER 2016, MARCH 2017 AND JUNE 2017 book”
I don’t have any of the publishers’ study material so I couldn’t care less if you were using and 1897 first edition – I still don’t have a copy
But I can find Highveldt on the internet
Now I’ve found it … and the figures on the internet do not tie in with your $2 million fair value adjustment – neither the original Highveldt question not the BPP UK supplementary questions
This is a June 2005 question and the note to the question states “Highveldt has a policy of revaluing land and buildings to fair value. At the date of acquisition Samson’s land and buildings had a fair value $20 million higher than their book value and at 31 March 2005 this had increased by a further $4 million (Ignore any additional depreciation)”
and there’s nothing else in the question relating to a $2 million fair value adjustment
Would you care to check and confirm that it is in fact the question Highveldt?
i am so sorry sir.. i had doubt about the Highveldt questions too. but i posted to clarify the question ‘Pedantic’. That’s why got confused. The details i have posted is from the ‘Pedantic’ question. sorry for the wasted time again 🙂
but i still haven’t understood the first question i posted. could you please clarify.
– P acquired S on 1st April 2008
– Consolidated RE to be calculated for the year ended 30 September 2008.
– At acquisition date fair value of a depreciable non-current asset was 2m in excess of its carrying amount. remaining life at date of acquisition is 5 years (straight-line method).My question is:
When calculating the consolidated retained earnings i get 18,000 for fair value adjustment of this asset. ((2m minus (2m/5 multiplied by 0.5)). However in the answer the fair value adjustment shows only 200, which is the depreciated amount before acquisition.
In ur notes chapter7: Q11 you took the fair value remaining after depreciation, but in this answer they have used the depreciation amount itself. Please explainSpeechless!
Have you looked at the recording of my answer to Pedantic – it should be the case that I have explained as I was recording why the figures are what the are
Check out that recorded answer of mine and then, if you’re still having a problem, come back to me
Here’s the link
https://opentuition.com/acca/f7/acca-f7-revision-kit/
and scroll down towards the bottom of the page where you’ll find Pedantic waiting for you
OK?
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