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In consolidation chapter i have a doubt related to fairv value adjustment
I know that at acquisition we have to record the assets and liabilities of subsidiary at fair value .
Now do we also need to do this post acquisition. Like if there is an asset with fair value of 5000 in excess at acquisition and post acquisition it fair value becomes 7000 in excess.what is to be done as the ifrs states to record the asset at ACQUISITION DATE FAIR VALUE????
I tried to find answer in ifrs 3 and i quote from it
“In general, an acquirer shall subsequently measure and account for assets
acquired, liabilities assumed or incurred and equity instruments issued in
a business combination in accordance with other applicable IFRSs for those
items, depending on their nature. ”
Please explain what to do post acquisition if there is a change in fair. Value after acquisitionHi,
In the exam you are not likely to see a change in the fair value of an item of PPE from the acquisition date to the reporting date, you would only ever need to adjust for the extra depreciation on the fair value adjustment at the reporting date.
You might see fair value in relation to say a provision or the value of inventory, and if this has changed then you would put in the updated fair value at the reporting date on the face of the CSFP and in the net assets working, with the change being part of the post acquisition movement in net assets (retained earnings).
Hope that helps.
Thanks
Hi,
In the exam you are not likely to see a change in the fair value of an item of PPE from the acquisition date to the reporting date, you would only ever need to adjust for the extra depreciation on the fair value adjustment at the reporting date.
You might see fair value in relation to say a provision or the value of inventory, and if this has changed then you would put in the updated fair value at the reporting date on the face of the CSFP and in the net assets working, with the change being part of the post acquisition movement in net assets (retained earnings).
Hope that helps.
Thanks
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