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Hello Sir,
I don’t understand that how figure of 1300 is calculated for investment in equity instruments in Noncurrent asset and why the investment figure is in asset side?
Moreover why do we add 300 in other components of equity in equity and liability?
Thank youStatement of financial position( extracts)
Non current assets
Available-for-sale investments (1,800 – 800 consideration + 300 gain) 1300
Equity
Other equity reserve (500 + 300) 800
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The investments are always shown on the asset (i.e Non current asset) side.
Intra-group investments [i.e One entity(parent) investing in the other entity(subsidiary) ] are not shown in the SFP.
Available-for-sale investments= 1800 (figure from the given SFP- Premier) – 800 ( consideration for acquisition by Premier) + 300 ( increase in the value = gain)
300 is also added to the other equity reserves in Equity and Liabilities section because 300 is increase in value i.e a gain and the question its self states that “The other equity reserve relates to these investments and is based on their value as at 30 September 2009” .
therefore any gain/ loss relating to this investment will be added /subtracted for the other equity reserves.Hmmm! Thank you Amy. I don’t remember you being appointed as a tutor to this site and yet Aishaasad’s question is clearly posted on the “ask the tutor” page
Maybe your assistance could be restricted to the general forum pages
I am extremely sorry Sir. 🙁 I didnt see its ‘ask the tutor’ page and just replied. I will never repeat my mistake ever again…….. I am very sorry again. 🙁
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