[Mohammad Usman]

are you still not going to answer my question?

[Mohammad Usman]

i don’t want to humiliate you. you are very senior and very respectful to me.i don’t want to trick you.you are my teacher . first i have not posted answer because i think it is not good to compare others.but when i feel confusing then i post it and want to seek help from you. i don’t want to prove that you failed.never ever

[Mohammad Usman]

sorry again to mike little

[Mohammad Usman]

no no. that was not my intention.i apologize if i hurt you.my intention was not to test you.i agree with your first answer that plant should be written at 6m(because in my opinion ias 16 state that initially assets should be recorded at cost, which is fair value of plant i.e $6m)and i am bit confuse why kaplan is doing so,thats why i posted kaplan answer.my intention was not to test you.being a learner i want to clear my concept and i mentioned that it is past paper question

[Mohammad Usman]

in bpp and kaplan kit answer record the plant with $7m and $3m is charged to retained earning(because land had a carrying vale of $4m)

kaplan answer:

” the exchange has commercial substance since the land generated no immediate economic benefits as it was not being used but the plant will be.The cost of plant will be measured at fair value of asset given up.therefore, the plant will be valued at $7m”

and please explain what the kaplan is trying to explain.

[Mohammad Usman]

we are going to give a asset of $7m and received a plant with value of $6m and $1m is loss going to report in SOPL.??

[Mohammad Usman]

i like to know fron you is the method which is described below will be acceptabe in term of pup on nca.

as in kaplan book,we calculate pup as difference in cv at subsidiary book(which sold the nca) and cv in parent books and then deduct from subsidiary net asset list as follow(from ch 9 example 1 ot notes)

—————————at acqu date ——————————–at csfp date

share capital ————–200000 ————————————200000
premiun ——————–10000 ————————————-10000
retained earnings———59333 ————————————-64000
Pup on nca – ————————————————————15000

you have deducted 20000 from sub and then adding 5000 to parent but net effect is 15000.will the above treatment is correct and not(logic) and secondly how the dividen is treated in above way and if sub is incurred loss which is in your answer then dividend which it pay for two month is from pre acquistion profits and dividend from pre acq pofit is deducted from retained earning.plz explain this matter(dividend).

thanks for answering my previous question

[Mohammad Usman]

thank u sir,

if loan notes are given as consideration for subsidiary acquisition then will we cancel finance cost in cis

[Mohammad Usman]

if loan notes are issued as consideration then we will not can loan note amount (as intra group item).will interest cost is shown in consolidated income statment

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