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Dear sir
The question of Prodigal ( amended) in BPP kit requires to calculate goodwill
On 1.4.X0Other equity reserve 2200
SOPL for the year to 31.3.X1 stated that loss on investment : (400)So why 6/12 of that is not included in the calculation of net assets but the other 6/12 is used to consolidate in OCI?
thanks in advance 😀
Why are you calculating net assets at date of acquisition? The question asks for a consolidated statement of profit or loss and a look at the equity section
Within the OCI section there is correctly stated 6/12 of the financial instrument loss.
The other 6/12 would be within the goodwill calculation
But you’re not asked for the goodwill calculation. If you HAD been asked, the fair value of Sentinel’s net assets would be reduced by $6/12 * (400) = (200)
But you’re not asked for it so it’s not shown in the printed solution
OK?
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