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Hello,
If company A was acquired on 1 January 2020, however, they had a revaluation of some PPE at the end of 2024 (i.e. has a cost of 100,000, acc. dep of 20,000, and new fair value of 120,000), when doing consolidation entries, how is this treated?
Regardless of when the revaluation occurs post acquisition, do we still include this in the acquisition analysis (calculation of goodwill and include it as a fair value adjustment). This will consequently cause it to have a BCVR journal entry?
Hi,
You would revalue the PPE as normal in the accounts of company A (presumably the subsidiary) at the date the revaluation took place (end of 2024). This is not the acquisition date and so we do not make any adjustments to what has already been calculated at the acquisition date (net assets and goodwill).
The revaluation is a post-acquisition movement and the group share of the post-acquisition movement in the revaluation is added to the group revaluation reserve on the SFP. The gain of 40,000 will be shown 100% through group OCI.
Thanks
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