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Hi,
I keep getting my consolidation questions wrong when there are adjustments to make(this is a big problem!!!!!!)
When there is a adjustment to the FV of land or say machinery, does this always go into the net assets calc? And if the items got revalued after the acquisition would this then mean it would be in the post acq net assets calc?
When there are good will adjustments – these effect P&L and the good will calc, never the Net assets calcs?
Is this all i need to know re FV adjustments? DOes anyone have a simple rule book for these types of adjustments?
Thank you!
A very distressed girl! (i forgot F7 and am having a total mare now!)
Fair value adjustments at date of acquisition will affect the goodwill calculation.
Any further adjustment to fair value subsequent to acquisition will affect post acquisition retained earnings / reserves.
Any impairment of goodwill will be expensed through Consolidated Statement of Income
Will that do?
I dont know how to calculate fair value adjustment m always stuck in that point please help me out of this
Hi,
You have to address the information given in the question in the appropriate fashion. One possible scenario is that you’re told what the fair value adjustment is and what it relates to. The other possible scenario is that you will be told the fair value of the net assets and be able to calculate the book value sing the subsidiary’s equity being share capital, retained earnings and other compo nets of equity at the acquisition date. The difference between the calculated book value and given fair value is the fair value adjustment.
Thanks
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