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I am so confused as to where they have calculated the deferred tax liability
i get that the net assets is 170 plus 6 for the revalued PPE = 176 the question tells me that the Identified net assets are 166
so 176-166= 10 x tax rat 30% = 3
now why has the movement then been 3 x 1/7 = 0.4 what is this?
thanks
JemmaSorry for the interruption in this thread but since my query is related to the same question so I thought it would be ok if I post it in this thread.
My question is related to the upward gain for the subsidiary Mixted. The question states that “Bravado had treated this investment as fair value through other comprehensive income in the financial stmts to 31 May 2008 but had restated the investment as cost on Mixted becoming a subsidiary”. The CSFP has to be prepared for the YE 31 May 2009.
The gain of 5m (credit entry) is shown in the GREs calculation but what would be the debit entry for this? Is it the cost of investment? when was the cost of investment debited (date)? I understand that the gain of 5m was first recorded in OCI and when Mixted became a subsidiary then it was reclassified from OCI to P&L.
Debit cost of acquisition. The top line in the goodwill working shows the “further consideration” as being $118 and then the fair value of the original holding is shown as $15
The original $10 has increased to $15 by way of Dr Investment in 6% of Mixted and Cr Retained earnings
OK?
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