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A contingent liability is always recognised in an acquisition, as long as there is a reliable estimate of amount. This wasn’t in the book, I found it in a previous exam question… which I got wrong!
A transfer of realisation of revaluation is just transferred from one to the other…through equity I think? Also not in the book (BPP).
obiora06 – the goodwill question was ‘on acquisition’ so no impairment was deducted for part A.
I couldn’t balance the Q2. I spent about 1/2 an hour just looking at the figures, couln’t work out how it was so wrong… Then realised I had put the Equity asset into equity (It’s an asset…. it should be with the assets), so I moved it but then ended up with a negative revaluation on financial assets through equity… then I ran out of time, but the SFP was only out by $1,500 then… Does anybody know the proper treatment for the Financial Asset? It’s gonna bug me 🙁
Hello, Thanks for asking this… I didn’t realise I didn’t know the answer… I was confused too because under UK Standards it is a choice but under IFRS it is a requirement.
It won’t come up now… because I know the answer.
🙁Hello
I actually used the BPP text book, but the rights issue was not explained very clearly, I used the Open tuition method in their notes (CRAP/TERP) and it worked out for me and the answers were correct. It helped that I stopped trying to make sense of it and just applied the formula.My problem is that the method shown for Bonus issuecalculation in the BPP text book is different to the method/answers given in the BPP revision book!!
Kind Regards
Becky