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Hi Mike,
can you tell me why the FV adjustment in this solution for the financial asset equity investment is not time apportioned for pre and post acquisition?
Thanks,
RonanHi
When did the fair value assessment take place? If it was at the date of acquisition, then it’s a pre-acquisition adjustment and affects the goodwill calculation
If it was at the year end, and not at the date of acquisition, then it’s a post acquisition movement
Does that answer it for you?
hi can you tell me how can i calculate share in post acquisition of subsidiary in order to do group retained earning calculation im not getting the solution of this question.
You know the figure for reserves at date of acquisition – you used the figure in working W2 to calculate goodwill
You know the figure for reserves as at consolidation date – its given in the question. You will almost certainly have to make adjustments to that figure for matters such as dividends declared, pups, excess depreciation on revaluation increases …… but you can derive the figure for reserves as at consolidation date.
Deduct from this adjusted figure the reserves as at date of acquisition and there’s your post acquisition retained earnings
Multiply by our percentage holding and you have “our share of S post-acq retained”
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