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Mid Year acquisitions

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Mid Year acquisitions

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by P2-D2.
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  • Author
    Posts
  • December 7, 2021 at 8:36 am #642881
    ilievas
    Participant
    • Topics: 7
    • Replies: 5
    • ☆

    Hello,

    I stumbled upon couple of questions that made me doubt my knowledge regarding mid-year acquisitions.
    At first I thought that the moment I see an acquisition month/date I take that up till the date of conso report and use that fraction for all accounts related to the subsidiary.
    I do understand that i am somehow wrong and saw the following pattern:

    P&L – always use a fraction from time acquired till conso FS
    BS – not always , in case that the acquisition happened on 01/01 then we do not use the time apportion but when do we also not do it then?

    Would you please confirm if this is so?

    I specifically got to think this way because in ex. 259 from BPP we have an acquisition on 01/10/20×8 and prepare the conso FS as at 31/03/20×9 ( and need to prepare SFP) and we do not take the time apportion into consideration.. Why?

    Thank you for the clarification!

    December 11, 2021 at 11:42 am #643894
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6443
    • ☆☆☆☆☆

    Hi,

    We never time apportion the assets/liabilities on consolidating, regardless of when the acquisition took place. The SFP looks at the assets/liabilities at a point in time and at the reporting date we control them all, hence consolidate them in full.

    Thanks

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