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Group Accounts The Consolidated Statement of Financial Position (1b)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Group Accounts The Consolidated Statement of Financial Position (1b)

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  • January 13, 2016 at 11:42 am #294312
    maddison
    Member
    • Topics: 2
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    • ☆

    Hi john,

    Thank you for your lecture. I was wondering why when the parent company buys the subsidiary why is it they value to company on share capital and pre-acquisition retained earnings and do not include non-current assets ?. Maybe I’m missing something. Your help would be much appreciated.

    Maddison

    January 13, 2016 at 6:15 pm #294421
    John Moffat
    Keymaster
    • Topics: 57
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    • ☆☆☆☆☆

    Share capital + reserves is always equal to the net assets..

    So share capital + reserves at the date of acquisition is the same as the book value of the net assets acquired.

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