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Consolidated SOPL

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Consolidated SOPL

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • December 5, 2016 at 3:10 am #353876
    complicated
    Member
    • Topics: 110
    • Replies: 210
    • ☆☆☆

    Hi Mike,

    This just occurred to me. Can’t believe I’m asking this only now:

    For example,

    A parent company acquires a subsidiary at the beginning of the year where the subsidiary had a building which had a fair value of $10 million and a carrying amount of $8 million. The remaining useful life was 10 years. At the year end date the fair value of the building was $11 million.

    The post acquisition revaluation gain would be $1 million (and not ‘$11 million’ – ’10 million less depreciation for the year’), is that correct?

    December 5, 2016 at 7:22 am #353923
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23323
    • ☆☆☆☆☆

    Why not?

    That $10 million will be the subject of 10% depreciation so, pre-revaluation, the carrying fair value will be $9 million

    It’s now being revalued to $11 million so that’s $2 million going to a Revaluation Reserve

    OK?

    December 5, 2016 at 9:25 am #353961
    complicated
    Member
    • Topics: 110
    • Replies: 210
    • ☆☆☆

    OK that makes sense, I’ll take note of that. Thank you 🙂

    December 5, 2016 at 10:26 am #353981
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23323
    • ☆☆☆☆☆

    You’re welcome

  • Author
    Posts
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