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@mikelittle said:
No, the 2m gain is a fair value adjustment as at date of acquisition and is part of the FV of SNA @DOAThe 2m is therefore notionally added to the land as at date of acquisition
The 1m is a post acquisition increase and should be shown as part of the calculation in working W3 (H’s own + H’s share of S post acq retained …..)
Is that better?
Mike, I really do not get this, how is revaluation gain of 2m + 1m post acq (Land) for the subsidiary become 3m-2m gain/loss and to add to it why is it reduced from the overall Penketh loss on revaluation. i.e solution answer says loss on revaluation of land ( 2200 – (3000-2000) gain for sphere) ? really confusing
The increase by $2 million was noted as at date of acquisition and formed part of the goodwill calculation
Since acquisition, the value of the land has increased by a further $1 million
The value of Penketh’s land, meanwhile, has fallen by $2,200
So the consolidated results need to show the $2,200 loss and, netted off against that loss, the $1 million gain on the Sphere land
In the suggested solution that $1 million gain has been explained as $3 million gain per Sphere’s statement of comprehensive income less the $2 million gain as at date of acquisition
Is that better?
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