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Hi sir,
1)I didnt understand the treatement for order backlog
2) why its intangible assets
Thanks
Hi,
1. The order backlog is now under the control of the parent. We could separate out this backlog from the rest of the other assets in the business and sell it on at its fair value. Therefore on acquisition, it will be recognised separately from the goodwill and measured at fair value.
2. It is intangible as it has no physical substance and arises from contractual rights. We are contracted to deliver the orders on the acquisition of the subsidiary.
Thanks
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