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i have two questions
going through practice kit and i must say it isn’t easy1) When they use (passed since acquisition) do they mean that the asset dosen’t exist at the date of acquisition so it isn’t meant to be included in net asset at acquisition when computing goodwill
2) A question from kaplan practice test kit (pyramid).
immediately after the acquistion, square issued $4million loan note of 11%, $2.5 million was bought by pyramid. all interest ws paid and received at reporting dateMy answer for question 2 – i deducted from net asset at the reporting date and i found out it was wrong..
Please explain why sirI don’t ever remember reading “passed since acquisition” – please check that you have quoted it correctly and then give me the full sentence in which you have found it
Deducting from the figures was correct ……. but you need to deduct it from both sides! Reduce the subsidiary’s liabilities and reduce the parent’s assets
It’s owed by the subsidiary to the parent so need to reduce both
Ok?
okkii.. so its more of an intragroup loan, so i treat it as a intergroup sales
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