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- This topic has 13 replies, 4 voices, and was last updated 9 years ago by MikeLittle.
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- February 20, 2015 at 2:14 pm #229326
Hi,
Starting to study P2 last weekend & on Q1, I am wondering where the €266 came from to do with land revaluation ?
Anyone know ?
February 20, 2015 at 4:54 pm #229340It’s detailed in working W1!
Shares, retained earnings and other components are $1,020, $900 and $70 respectively (per the question paragraph 2 note 1) a subtotal of $1,990
The total fair value of the net assets as at that date was $2,250 (paragraph 2 note 1)
There is a contingent liability, previously unrecognised, now to deduct in arriving at the fair value of the assets and so far we have a subtotal of $1,990. Following the deduction of that contingent liability, we can now account for $1,984 fair valued net assets.
But the question tells us that the fair value is $2,250 and that the difference is due to an increase in the fair value of the land
$2,250 – $1,984 is $266
Ok?
February 21, 2015 at 11:49 am #229487Thanks MikeLittle,
Your a jem !!
February 21, 2015 at 11:52 am #229490You’re welcome
🙂
A gem!!!
June 6, 2015 at 5:10 am #254275Hi Mike,
Just to make sure. as in the question,will fair value adjustment of subsidiary’s assets affect the goodwill value at the year end?
Thank you.June 6, 2015 at 9:34 am #254407A change in the fair value at the year end will not affect the goodwill as calculated at acquisition date
June 6, 2015 at 3:09 pm #254515If the fair value adjustment happened at the date of acquisition, however, the value recognition come after the acquisition date. Say, subsidiary has a building with carrying amount of £2m, but the building is required a individual valuation so the valuation received after the acquisition date. In this case, fair value adjustment will be involved in Goodwill calculation. Right?
June 6, 2015 at 10:49 pm #254627Correct
June 7, 2015 at 8:06 am #254674Thank Mike.
June 7, 2015 at 9:43 am #254703You’re welcome
June 9, 2015 at 3:46 pm #255580Hi Mike,
I think I’m going to ask you more questions in the following months:p. I just sat on P2 exam today. Those questions remind me of nealy every lines of your lectures even though i am not that confident to say that I made the working right. Pretty unsure. Maybe I need more practices on difference scenarios to have a clearer picture on each standard applications.
Anyway, I still feel very very grateful to have such a skilful and interesting tutor around, helping me solve those complicated questions . “like” you one hundred times.June 9, 2015 at 6:18 pm #255710Thanks Cheri for those kind words – but don’t have thoughts of failure! There must have been 1,000s of cases over the years where students have said “I know for sure that I’ve failed” yet when the results come out, there’s the score of, say, 68% facing them.
And then they say “I cant understand it – I knew that I’d failed”
I’ll let you into a secret! I did exactly the same after my final advanced tax exam! But I’d passed it even though I had convinced myself that I’d failed. But don’t tell anyone else that – you’re the only one that I’ve ever told
June 11, 2015 at 5:54 am #256243That secret must have been the best one you have ever told Mike! It amazes me that you spend your time educating students and explaining questions. I’m turning my steering wheel to this site full time!!
And now I need the accelerator!!
I do pray that my suspected fail will turn into a figure like that staring at me 🙁
The tears that go into this qualification…. Only can make us more diligent and stronger.
Thanks Mike for sharing your expertise and knowledge !June 11, 2015 at 8:28 am #256284You’re welcome – just make sure that no one else knows that secret! If anyone else mentions it, I shall know that it was you that told because you are the only person that I have shared it with!
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