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Contingent Liability in Group scenarios

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Contingent Liability in Group scenarios

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by P2-D2.
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  • Author
    Posts
  • August 23, 2019 at 2:15 pm #528524
    slosar
    Member
    • Topics: 6
    • Replies: 3
    • ☆

    Hello,
    in doing the Viagem Co group consolidated statement of Profit or Loss and calculating goodwill on acquisition of a subsidiary there is a mention of a contingent liability in relation to a group.
    It rings a bell from one of the lectures, but I cannot recall what it was and unfortunately I cannot fnd it anywhere. Could you please remind me what it was? I only seem to remember that it was supposed to be a current liability?

    I would appreciate your help.

    August 27, 2019 at 8:30 pm #539507
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    The contingent liability within the subsidiary is recorded at fair value within the group accounts. This adjustment will reduce the net assets at acquisition as we are recording a liability.

    Thanks

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