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marium salman
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Hello sir .
My question is, that while acquiring the subsidiary, we’ve been giving NA as $110m , share capital of $25, RE as $65m and other components of equity $6m. The excess of FV of the NA is due to non depreciable land.
So in W2 of NA of sub, will we include the OCE of $6m which would be $14 of land or without the OCE which would come up to $20 of land ?
Please let me know it’s confusing .There was a similar question but instead of OCE we had been given other reserves? So my question is the same will we include it in w2 and then calculate the excess of land or without it?
So will we just have another separate working for OCE and other reserves?Thank-you.
P2-D2
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Hi,
OCE is part of equity and this is equal to the net assets of the subsidiary, so when looking at (W2) the OCE must be included. You therefore get the FV of land to be $14.
As you say, it is in other questions and so it is therefore vitally important.
Thanks
marium salman
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