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Dear Mike
Thanks for the one before
two problems here Q46 Plateau:
1. the depreciation of 100 k usd must be adjusted to the retained earnings of Savannah since the asset was in his posession during the year, the profit of 500 k usd is adjusted to Plateau, that is ok
2. the professional fee – according to the book – must be deducted from share premium, and not from RE – if it is related to share issue, and here mostly it is
ThanksI like the comment about the share issue expenses and admit that I missed that point about the restricted uses of the share premium account. Thanks for that.
The 500 pup on asset transfer and the 100 additional depreciation based on that 500 should now be netted off and adjusted in the seller’s retained earnings. It’s a relatively recent change and the recordings of some of the earlier answers are in line with the former situation. I’ll get round to updating them / re-recording them when this season is over
The new(ish) provision says that the pup on an asset transfer should be adjusted net of the “excess” depreciation in the seller’s retained earnings.
The videos have not yet been updated so show the depreciation on the pup as being adjusted in the buyer’s retained earnings
The share issue expenses MAY be deducted from retained earnings or (better) from the share premium account
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