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Hello,
I watched the recordings but i still don’t understand why the increase in value in Land is not included in the fair value adjustment, could you explain to me please?
Also, could you explain why the gain on investment in equity instrument is not added consolidated retained earnings calculation please
Thank you
The fair value adjustments are made as at date of acquisition in order to arrive at “Fair value of S net assets at date of acquisition” when calculating working W2 Goodwill
The land value increase occurred AFTER the date of acquisition so is not included as a fair value adjustment as at date of acquisition
Better?
Yes that’s much better, but what about the gain on investment in equity instrument, why is not added consolidated retained earnings calculation ?
Here are two extracts from the examiner’s printed solution – the first is from the statement of profit or loss (comprehensive income) and the second is from the statement of financial position:
“Gain on available-for-sale investments 300”
“Available-for-sale investments (1,800 – 800 consideration + 300 gain) 1,300”
I can’t understand your post!
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