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Hi ,
Sir I just wanted to confirm that any of the fair value adjustment is only made in Good will working? It does not effect the Ret Earns ? If there is a gain/ Loss
Only the depreciation effects the Ret Earns?
Please correct me where I am wrong and please add any information that I should know related to this.
That’s ok. Personally I include the fair value adjustment into retained earnings “today” and retained earnings at date of acquisition, but that’s just the way I do it! I could equally well miss that fair value adjustment off both lots of retained earnings and arrive at the same answer
So that doesn’t matter one may include fair value adjustment’s depreciation or not?
I never said that! You MUST include the depreciation on the fair value adjustment. What I said was that I personally include the fair value adjustment in working W3 as an adjustment at accounting date as well as an adjustment at date of acquisition. Also, as at accounting date, I include the depreciation on the fair value adjustment.
Now, if you think very carefully about what I have just written …..
NOWHERE have I said that the depreciation may or may not be shown, and
I repeat, you may show or not show the fair value adjustment in working W3, but if you do show it, it should be both at accounting date AND as at date of acquisition
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