311 Prodigal Co (BPP REVISION KIT)

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July 30, 2021 at 6:49 pm #629875
Andreas412
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Hello
In this solution in the goodwill calculation he takes the other comprehensive income of 66,600 and not the profit for the year 66,000. The other comprehensive income includes a revaluation that hapenned after acquisition !!!! Isnt it right not to include something that hapenned after acquisition ?
August 1, 2021 at 9:54 am #630014
P2-D2
Keymaster
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Hi,
I’m a bit confused as I’ve not got the revision kit to hand, sorry. Could you please elaborate a bit further?
Thanks
August 1, 2021 at 4:26 pm #630050
Andreas412
Member
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Hello
the extracts are from Sentinel Co
Profit for the year 66,000
Other comprehensive income
Gain on revaluation of land ?1,000
Loss on fair value of investment (400)
Total comprehensive income 66,600
It says in the first note
1) During the post acquisition period Sentinels land had increased in value over its value at date of acquisition by 1 million. Sentinel has recognised the revaluation within its own financial statements.
The goodwill calculation in the solution takes the other comprehensive income of 66,600 and not the 66,000, although it states that it hapenned after acquisition.
Thank you
August 8, 2021 at 10:32 am #630756
P2-D2
Keymaster
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Hi,
Does it not say that the 1 million was at the date of acquisition and not after the acquisition date? If so then this would form part of the net assets at the date of acquisition and not form part of the past acquisition movement in net assets.
Thanks.
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