[phunguyen290699]

I dont really remember the question in details. But I read in Study hub, it says “When measuring fair value, all characteristics of the asset/liability that a market participant would take into account should be reflected in the valuation. This could include the condition or location of the asset and any restrictions on the use of the asset”. the potential buyer who offer the price of 35m because of the location of assets. So I think FV is 35m.

[phunguyen290699]

Firstly, I adjust the fair value of 35m of the PPE by the entry (Dr PPE, Cr RE ), then I do the goodwill entry as normal. But suddenly my assets do not equal liabilties + equity by the amount of the PPE adjustment. Due to time pressure, I decided to equalize that by balancing method and move on to the next question.

[phunguyen290699]

I mean if the consideration is 35m, it would be included in goodwill calculation and increase the goodwill. Right? and the entries would normally be:

Dr Goodwill
Dr FV adjustment ( in case net assets of acquiree increases in FV)
Dr share capital, pre-acquisition retained earnings of acquiree
Cr NCI
Cr consideration (the amount of investment in acquiree)

So if we dont credit PPE, it must be credit entry elsewhere? I guess.

[phunguyen290699]

can you confirm if the property is the one and only consideration for 60% equity shares?

And if you still consolidated the property, what would be the credit entry for that to balance the goodwill entries?

[phunguyen290699]

you are correct Mariya2311, in both 10% initial equity holding and net assets circumstances. In studyhub, it does requires previously hold equity shares to be revalued and the difference will be recognized in OCI if it was measured at FVTOCI before the date control is obtained.

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