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From the opentuition learning note :
On 1 January 2014, Rey acquired 70% of the equity interest of Finn for a cash consideration of $1,340 million.
At 1 January 2014, the identifiable net assets of Finn had a fair value of $1,850 million, and retained earnings
were $450 million. The excess in fair value is due to an item of property, plant and equipment that has a
remaining useful life of 10 years.The value for subsidiary retained earning on SFP as of 31Dec 2015 is $800 million.
During the lecture the post acq profit was shown as the Carrying value of the Fair Value adjustment instead of movement in Retained earning.
on Acquisition 400 / on reporting date 320 (400 x 8/10)
Should it not be 800-450-80 ?
80 as in depreciation for two years that would reduce Retained earnings.In lecture I clearly say
EITHER use working in printed answer which fits in with your approach
OR use change in net assets as in the lecture
As retained earnings hasn’t been tested for some years, I would net get too excited.
🙂
Thank you sir !
i watched your lecture multiple times word by word and noticed your mention of the printed answer and checked it there.
Your short replies are always to the point.
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