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Dear Sir,
Could you please explain the answer in Joey Mock BPP part (a)Contingent liabilities after initial recognition must be measured at the higher (!) of the amount
that would be recognised under IAS 37 Provisions, Contingent Liabilities and
Contingent Assets and the amount initially recognised under IFRS 3.
– Amount initially recognised under IFRS 3 = 6
– Revised amount recognised under IAS 37 Provisions = 5According to this phrase we should not adjust our initial recognition, bet in calculation of Goodwill he correct it on 1.
Why?
Regards,
ValAnswer to Joey appears unclear to me. Learning point is that is that contingent liabilities must be measured at FV for goodwill calculation. As the new valuation is within 12 months I’m not sure why they haven’t used 5. The computation is more complex than the real exam since the syllabus change.
Don’t forget that calculation marks are now given for approach.
(In future please post with thread header reflecting topic – e.g. contingent consideration).
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