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Dear sir,
I wanted to know, how do we calculate the post acquisition reserves? In many questions, I see that they take total equity and deduct the net assets from it. Could you kindly help me understand the logic behind this calculation? It is for questions, where the value of associate is calculated a year after acquisition, but the profit figures are not stated but rather the equity figures are.Thank you
Either:
RE c/f – RE b/f
Or:
NA / equity c/f – NA / equity b/f/
Why?
NA = equity = SC + RE
Just think back to your Financial Accounting
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