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I have a doubt regarding the share capital and share premium. This question has share exchange and normally, they are adjusted to the share capital and share premium too. But why is it not done for this question??
Hi,
It will depend if it has already been adjusted for or not. If they’ve already processed the entries to share capital and share premium then we don’t need to do so, all we need to do is to find the cost of the investment. This can be found from the number of P shares issues multiplied by P’s share price.
I think this is what has been done in this question.
Thanks
Hi,
I also have a query regarding this question. Why did we not calculate finance charge on the laon notes issued by PICANT to ADLER? And in turn, added it into current liability and subtracted it from the group retained earnings?Regards
I’ve not got the question to hand, sorry, but have they not already accounted for the loan note finance cost based upon the accruals concept?
Thanks
This is the only information provided that is related to associate
“On 1 October 20X3 Picant also acquired 40% of the equity shares of Adler paying $4 in cash
per acquired share and issuing at par one $100 7% loan note for every 50 shares acquired in
Adler. This consideration has also been recorded by Picant.”Here, they have mentioned that the consideration has been already recorded. So we will consider that loan note finance cost has also been recorded unless told otherwise. right?
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