[debbie]

That is great I see where I was going wrong now thank you for your reply I wasnt getting the 700 to give the 500 at the year end.

Thank you

[debbie]

Hello

I am really struggling with the fair value adjustment even with the illustration in my book.

Question says the fair value on spear difference on sub relates to ppe being depreciated through cos over remaining life 12 year from Acquisition date. The associate fair value relates to piece of land ( which has not yet been sold since acquisition.

This is information in question
Acquisition date 1/4/2004
At Acq’n
Sub = SC=2500 RE=4000 SP 500 FAIR VALUE=8200 INVESTMENT=7000
ASS= SC 1000 RE=3000 FAIR VALUE 5000 INVESTMENT 2500

At 31/12/2010

Sub = SC=2500 SP=500 RE=6200 PROFIT IN YEAR WAS 4200.00
ASS = SC=1000.00 RE=3500 PROFIT IN YEAR WAS =1840

Answer shows

Sub

At aqu 1200 – FV ADJ (700) AT YEAR END 500

ASS
At aqu 1000 FV ADJ 0 AT YEAR END 1000

Please can you help at what i am missing

Thanks

[debbie]

That is great thank you for your help

[Author]

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