part disposals-merhchant and grange

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August 28, 2016 at 7:25 pm #335839
hj
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i have a doubt for when calculating part the disposal ,the value of net assets is adjusted to the date of disposal..comparing these 2 questions why have we added a fair value adjustment of 14 to nathan’s NA in merchant(june 2014) but not added fair value adjustment of 4 to fences’s NA in grange question(dec2009)
August 28, 2016 at 9:58 pm #335847
palmy
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I think the treatment is actually the same:

Sale of 8% interest in Nathan (Merchant):

8%*(120 (per quest) + 14 fv adj + 12 g/w)= 11.68
Compared to 18 consideration, it gives an adj to p’s equity of 6.32

Sale of 25% interst in Fence (Grange):

25%*(232 (per quest) + -21,53 fv adj + 8 g/w) = 54.62
Compared to 80 consideration, it gives an adj to p’s equity of 25.38

The -21.53 fv adj includes the 4 fv adj, the corresponding depreciation and the conting liab of 30 subsequentely revised to 25.

I would encourage you to post this kind of questions in the P2 Ask the Tutor forum going forward.
August 30, 2016 at 5:14 pm #336336
hamza
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i have a confusion between these two questions too..we add goodwill figure to net assets when calculating for fence disposal but when it comes to the disposal of nathan in merchant we dont include goodwill..why is that??
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