- This topic has 1 reply, 2 voices, and was last updated 8 years ago by
.
- Posts
Dear Mike,
I have few questions regarding the last example of chapter 10, where we have to construct all consolidated statements.
1. How can I find the carrying value of investment sold in W3A?
2. Af the end of CSoFP, tax payable is only 15000, does this mean tax incurred in income statement are all paid? Is this an underlying assumption when calculating these figures?
Thank you
1) It’s recorded in the parent entity’s statement of financial position
When a parent acquires a subsidiary, the cost of the investment is recorded in the parent’s own records – after all, it is the parent that has made the investment
That investment is held at cost until the parent decides to sell the subsidiary and then we go into working W3A
2) “does this mean tax incurred in income statement are all paid?”
No, not at all. Do you see the second line in the question “Other net assets” Those figures of $750,000 and $700,000 will include the tax liabilities for Diana and Liga respectively
“Is this an underlying assumption when calculating these figures?”
In light of the previous comment, no, this is not to be taken as an underlying assumption
OK?
- The topic ‘chapter 10’ is closed to new replies.