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Hi, can anyone plz help me with this confusion? Thanks,
In the OT notes and lectures I learned to adjust the F.V of the assets in working for Goodwill and also in the working to retained earning (minus any excess depreciation).
But in the bpp book the answers I checked had it different.
They had only deducted the excess depreciation from the retained earnings calculation and didn’t add the F.V increase.
Which way is correct?Hi – both ways are correct! It’s just that following my method, it makes the calculation of the nci just a bit clearer. If you look at OT’s way, the same figure is added into the retained earnings NOW and the ret ears at date of acquisition calculation but then too is the additional depreciation deducted from the ret ears NOW.
By doing it this way, it’s then easier to see the nci fv net assets as at date of consolidation.
BPP only adjust ( for ret ears ) the depn on the fv adjustment.
Thanks!!!
Last time I used your lectures (in F4) I was shocked (with happiness of course) at the results. I hope I go through this time as well.
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