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FV adjustment for assets was really tricky to get on taking that you need to find the balancing figure first and then count 2 years depreciation.
thanks for this example!
Hello! Thank you for the lectures! They are very helpful! Why in W5 when we take 70% of retained earnings, we take 70% of 270 (total NA post acquisition) and not of the line “retained earnings” post acquisition. We know that the total is 270, the share capital is 1000, not sure what to do with FV adjustments, so we could calculate the exact line retained earnings.
The remaining 30% are attributable to NCI
Hi,
Thanks for the kind comments, it’s always great to hear that people benefit from what we do here at Open Tuition.
As there are no other components of equity within the question we can just take the movement in net assets as the movement in retained earnings. If you wish the 270 comes from the increase in retained earnings of 350 (800 – 450) less the depreciation 80 on the FV adjustment that would go through retained earnings too.
Thanks
Hi,
You mentioned that adding the assets and liabilities across in the CSFP doesn’t give any mark in this exams, so should we ignore doing that?
Hi,
If you ignore adding them across then you would not lose any marks, but if you are a marginal candidate then it would work in your favour if you were to add them across.
Thanks
Hi,
Thanks for lectures they are very helpful.
Can you please let me know how you arrived at the acquisition share capital of 1000 in example 2.
Thanks.
Hi,
I’m glad you find the lectures very helpful.
The acquisition share capital of the subsidiary will always be the same as the share capital at the reporting date. The reporting date share capital can be found in the statement of financial position of the subsidiary.
Good luck with the rest of the course.
Thanks