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Oh. I didn’t remember that this wasn’t examined at F6 level. Actually as there is no P6 OT tutor I asked my question here. My question was in context of P6.
Obviously no. Actually my doubt came after doing question Chemclean where the acquirer did not conclude the benefits from the production of a product using the acquired intangible are probable.
Obv i know the marks wont be much for this in for an SOFP question but still
Alright sir
But then what this last line in para is trying to say?
If the initial accounting for a business combination can be determined only provisionally by the end of the first reporting period, the business combination is accounted for using provisional amounts. Adjustments to provisional amounts, and the recognition of newly identified asset and liabilities, must be made within the ‘measurement period’ where they reflect new information obtained about facts and circumstances that were in existence at the acquisition date. [IFRS 3.45] The measurement period cannot exceed one year from the acquisition date and no adjustments are permitted after one year except to correct an error in accordance with IAS 8. [IFRS 3.50]
I am confused because this contingent amt will obv be charged to p and l and so not be included in the amt for investment in sub in separate financial statements of the parent.
Sir there is no mention in the question that further 5000 units have been ordered further. It only seems that further 3000 units have been ordered seeing the 7000 units delivery subsequently. So given we clearly state our assumptions and base our calculations and treatment on that 3000 units were ordered will we get the marks. Or shud we assume always otherwise in such cases?
Right. It was actually mentioned in the BPP text but as u said u didnt have access to it I quoted the IAS’ para
Thank you
Its not written as such at least in the question and you said in the video that its to the parent.
Anyways got it clarified. Thank you. ?
I think if cash is chosen we wud recalculate the liability at fair value. If the amt is higher than previously recognised we wud debit equity and credit liability by the amount we calculated at the grant date as excess. Any remaining amt wud be debited to profit.
If equity is selected we wud debit the complete liability recognized for this and credit it equity.
The tax base of an asset is the amount that will be DEDUCTIBLE in the future.
The tax base of a liability is the amount that will be taxable in the future.Development costs that are capitalised are an asset and these costs have already been deducted in determining the taxes. Hence none of the capitalised amounts are deductible anymore. So a nil tax base.
Okay
But sir in the example on page 270 they have only calculated the intrinsic value on the exercise dates and fair value is calculated only for those options that weren’t exercised.
It’s actually mentioned in BPP textbook as such with the quote of the paragraph no. in the IAS 23
Anything you want to add here sir? @P2-D2
