Mini Exercise Questions – Goodwill Q.3 Patricija & Sergejus

Dear Mike,

First of all I would like to thank you for your lectures. I find them very helpful for paper F7.

In relation to the above mini exercise question I have two queries I would appreciate you could help me with.

1. Subsidiary R.E as at DOA. as per answer it shows 4.000.000$
However I don´t see the nominal value as at DOA of 1 $ in Sergejus.

2. RE B/f as per answer it shows 3.500.000$
However as per question it states that the R.E for the y/e 30.04.2010 were $6.5m.

I thought the only figure that needed to be adjusted to the mid-year acquisition was the profit for the year. 6/12 x$3m

Please could you explain how you get to $3.5 m R.E b/f please?

Thank you very much.

Kind regards,

Isabel