June 2011 Rose --How to deal with post acqn amortisation

Is it not the deferred tax implication of the, presumably, 30% tax applied to the "revaluation" of the previously not-recognised asset?

Hi Mike,
Thanks for your quick reply. Afraid there is nothing to deal with deferred tax in this Q.
There is a very similar question in kaplan revision kits--it is about trade name

Kaplan revision kits Q1 Glove

In kaplan kits Q1 answer--> w7:
The accounting entry:
Dr group retained earning 0.8m
Dr NCI 0.2m
Cr trade name 1m
But when you check W5
The accounting adjustment are:
Other reserves + 0.8m
RE -0.8m
Where is the 0.2m?
And also the +0.8 in Other reserve is disagreed with the accounting entry in W7 above.

If you were in the exam, how will you treat the intangible asset identified at acqn but not yet recognised in FS?
What's your accounting adjustment for the FV and amortisition?
Personally, I thought the answer which was given by kaplan kit and the examiner was too complicated. Is there is a simply way to deal with it?

In my working 2 ( goodwill ) I include the fair value of the previously unrecognised asset as at date of acquisition.

In working 3 ( consolidated retained earnings ) I include the fair value of that same asset as at the date of consolidation and then, in the lower half of working 3, I include the fair value as at date of acquisition ( from working 2 ). In that way, my working 3 shows the post acquisition fall in value ( here, through amortisation ) and gives me the "correct" post acquisition retained figure for the subsidiary. From that figure we can then take the parent's share and add to the parent's own retained earnings and take the nci share to working 4A to calculate the nci on the Statement of Financial Position.

I don't know if that's better for you but it certainly seems easier to me