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Res mam/sir,
Net Assets refers to total assets minus total liabilities of company.
My doubt is that,
When we calculate Net Assets of subsidiary (WNO 2)
The only elements included in that are equity of subsidiary and any fair value changes in asset of subsidiary, which tells the capital of subsidiary.
Can you please help me out with this.If you want to ask the tutor directly, kindly post your queries in Ask the Tutor SBR Exams. This forum is for students to help each other.
In the statement of financial position, the total assets equal the value of total liabilities plus equity. Therefore, when we calculate net assets (A-L), it should equal equity.
When calculating net assets of subsidiary at acquisition, IFRS 3 requires that all assets and all liabilities of the subsidiary should be measured at fair values. The equity balance of subsidiary shows the Book Value of net assets, which might not equal the fair values net assets. Therefore, we have to incorporate fair value adjustments in the book value of equity to bring the balance to fair value of net assets.
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