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Dear Tutor,
In BPP revision kit mock exam 1 section A (1) Joey, there is a contingent liability which makes me confused with a basic rule about remeasurement value within a year of first recognition. eg: 01/12/2003 first recognition £6m, a later within 12 months since 01/12/2003, at 03/2004, there was a revision of the estimate of the liability $5m. based on my studying relevant chapter (I can’t remember which chapter), $5m revision estimate is right one. but the answer chooses $6m.
Would you please help me to verify it? the accepting revision measurement within 12 months is which chapter content? do I mention the same principle or different one?
Many thanks
Assume you buy a sub on 1/4/22.
The FV of assets and liabilities acquired can be remeasured until 31/3/23, if evidence comes to light that the original FV was wrong.
The answer said that Contingent liabilities after initial recognition must be measured at the higher of the amount that would be recognised under IAS 37 provision, contingent liabilities and contingent assets and the amount initially recognised under IFRS3, I am confused it.
accordingly the answer choose $6m.However later in the end of calculation goodwill, there is last row item shown as : Contingent liability: $6m-$5m (1).
basically based on answer logical like these: when calculating net asset of entity at acquisition date, choose $6m; while when calculating goodwill especially in the last row minus $1m. I don’t understand what theory it included.
would you please explain a bit further?
Many thanks
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