Sir,for Specimen Exam 1 applicable from September 2018 Q1 (a)(i) "Mach"
for the examiner answer:
Why the adjustment to the group financial statement will Dr RE $3m and Cr PPE $5m?
Will should remove the profit on disposal only of $2m?Thank you.
Ask the Tutor ACCA SBR
mach
6y ago#1They have to measure consideration at FV - so revalue the land to 5 Dr PPE or IP and Cr Reserves with 2
Then transfer land to seller of company Dr Inv in sub Cr PPE or IP with 5
No inter-company profits because this is not a transaction between 2 group companies
Why the increase in FV of land is recorded in RE rather than OCI?
Will the transfer of the land recognised/appear in the subsidiary 's individual FS?
Thank you.
6y ago#3If it's PPE - OCI and if it's IP RE.
Reserves analysis is unimportant in SBR.
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