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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Investment Value in Deferred Consideration
Sir,
When we discount deferred consideration while doing consolidation, the entry we make is:
Investment Dr.
Deferred Consideration Cr.
why in subsequent years, the value of investment recorded in separate financial statements is not increased when the deferred consideration liability is increased with the unwinding of discount. Although I understand the concept of unwinding yet this question is asked just to clear the confusion related to investment value rather deferred consideration liability.
Thank You!
Double entry is:
Dr P&L – finance cost
Cr Liability
Investment has been measured at fair value as at the date of acquisition – you can remeasure is as FVPL or FVOCI but not worth the hassle in practice.