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Dear Professional,
“On 31 December 20X6, Kutchen Co acquired 80% of the equity interests of Mach Co, a privately owned entity, for a consideration of $57 million. The consideration comprised cash of $52 million and the transfer of non-depreciable land with a fair value of $5 million. The carrying amount of the land at the acquisition date was $3 million. The land is still carried at that amount in the group financial statements at 31 December 20X6 as the proximity of the transaction to the year end date meant the land had not been transferred to the seller of the shares in Mach Co.
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Why both Other Component of Equity +2 and retain earnings +2 in this case? Shouldn’t this be double counting?
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