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plzz someone explain me da treatment of fair value realise after we ACQUIRE SUbsidiary with some example.
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add the fair value adjustment to net assets at date of acquisition in the calculation of goodwill and debit P.P.E on the consolidated statement of financial position as well
Am asking about da treatment of fair value which is realised after the Acquisition .
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ok let me give this a shot A has acquired 80% in B and the good will acquired is $10,000 now a year later B’s Non current asset value has increased by $5,000 so the entry will be:
Dr. Non Current asset $5,000
Cr. Goodwill $5,000
Being increase in fair value of NCA of subsidiaryGuyz ur not getting my point for question is for fair value realised .
like an e.g :-
A Co Acquired B , at the time of Acquisition fair value of land is decrease by 5M ,it is written down by this amount shortly after the aquisition and has not change in value since then .
now plzz some one explain me the treatment .Hi Murtazanek,
It would really help if you make it clear in your question.
Let me try to understand. You are asking what happen when the relavuation actually take place after the acquisition. Meaning not on the acquisition date where the value is required for the goodwill calculation.
In my opinion, if the revaluation happens after the event then the plus and minus will affect the subsidiary´s Retained Earnings at the reporting date for the Consolidation and the affected Asset if the Subsidiary has not recorded the surplus or devaluation of the asset if it happens to the Subsidiary.
The same to Parent. If it happens to parent the it will affect the Parent´s RE and Asset affected.
Does that make sense?
Hi Ratna
you should refer to QUESTION PLATEAU adjustment 1 ,,, u can understand the question what am trying to ask .I think
“plzz someone explain me da treatment of fair value realise after we ACQUIRE SUbsidiary with some example. “
is not very clear. 😉
You obviously can make the example yourself by looking at the later example you have made. 😀
We all would like to help each other.
Do you think my respond above answers your question?
Regards,
Ratna1238
Ratna in ur answer provided above u r explaining the simple revaluation treatment after an acquisation ? … if its a simple revaluation then wo not take its effect on retained earning until the revaluation realised , we just have to increase our reavaluation reserve and plant .
well am talking above is fair value adjustment which take place at the time we acquire subsdiary and its treatment came on calculation of GOODWILL n have to increase plant cost .i have made my question clear on above example A Co .
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@ tabyshah
I think proposed dividend, once not declared should not be consolidated.
we can disclose this by way of notes. that is what i think.- Topics: 0
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plz can someone to me the treatment of unwinding a discount
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hi i made a typing mistake.what i meant was how do we unwind a discount,give me an example
@marvinosa : Discount of what? Goodwill? Trade intercompany?
@murtazanek don’t get confused , since nobody answered to ur particular question. i would like to answer and make it clear to u with ur given question.
Code:A Co Acquired B , at the time of Acquisition fair value of land is decrease by 5M ,it is written down by this amount shortly after the aquisition and has not change in value since then .Treatment:
if fair value increases, we add that amount in goodwill calculation but since in this adjustment fair value is decreased by 5m then we will deduct 5m from goodwill calculation. and in net assets of subsidiary. there will be 5m with minus sign at acquisition date and there will be NIL at reporting date of net assets in acquisition.u might think why it is NIL at reporting date. let me clear u. if u look at the adjustment. it clearly says it is written down by this amount shortly after the aquisition, this sentence means parent has already taken affect of fair value decreased in its accounts book, meaning parent has already decreased the value of LAND by 5m in its accounts book. now you don’t need to decrease the value of LAND by 5m on consolidated SFP. and there is no balance of fair value decrease at the end of financial period since parent has already taken its affect in its accounts book, that’s why there is NIL at reporting date in net assets of subsidiary.
Thanks, hope it helps u
Hi, I have been practising consolidation questions for months and have good command. The only thing I miss is how to maintain the “double entry” system while doing adjustments.
For example while doing any other question for adjustment , I am writing debit & credits on the BS provided in the question.
However, in consol. question , I dont know how to do that and once I leave that , later I get confused how to tie my balance sheet.
So can any one suggest best way to keep my BS reconciled while doing consol. question
Many thanksHi, Can anybody tell me how to control double entry while doing consolidation question.
Best regardsMurtazanek, if you had made your original question clearer, then help could have come your way sooner! I’m still not convinced that sagar123 has correctly answered your query. Would you be so kind as to write out the full paragraph from the question so we are all able to consider the problem
Irfan Saab !
Please stop clearing the confusion as it is not appropriate to use this term with every reply you post.
Everyone here is a volunteer and learner, you and me too.
If you have answer to my question, you are most welcome to reply. But pls stop using this embarrassing word “CONFUSION”.
assalam-o-alaikum Shunmas Beeablo
ok so u have problem with the term “confusion” used by me in my every reply. lol
why only u have problem with that term ? if it is really true why not anyone else is pointing it out ?
if someone has some problem and getting confusion to understand/solve it then when i say in my reply let me clear ur confusion with that problem then what is wrong in it ? just can’t understand, u r the only one who is saying this, i would like to know more comments on it by others whether i m wrong using the term “confusion” in my reply or not then only i will decide not to use it again in my reply
If u go in F7 forum , u will see a topic created by user named with “Confused with the Workings method” and i can’t use the term confusion in my reply to clear that confusion with that problem , then it becomes embarrassing word ?
ofcourse everyone here is a volunteer and learner and helping each other to solve the problem and that’s what i m doing here
Thanks
Irfan
love u allHi why no one replies to my question ?
Please atleast respond even if you cannot answer
Many thanksI am not having problem with you saying this word in your every reply…but specifically, you are using this word…if no one said to you before, thats not the thing…but you wrote it to me and that sounds embarassing to me…and my intelligence, and no one can undermine my intelligence…
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