Hi, I had a question regarding the treatment of professional fees such as legal expenses or accountancy fees when acquiring a subsidiary.
A question asked about the difference in treatment in the individual financial statements vs the consolidated financial statements. (How to treat professional fees of $9m.)
The mark scheme then went on to explain that in the individual financial statements, IAS 27 applies.
The parent has varying treatments.
If the parent chooses FVPL, then expense professional fees. (IFRS 9)
If the parent chooses FVOCI, then capitalize professional fees. (IFRS 9)
If the parent chooses to use cost (IAS 27), the professional fees should be expensed in accordance with IFRS 3. I am not sure with this treatment. I believe the cost should be capitalized because this is the individual FS? Also, this is a direct cost incurred to acquire this subsidiary.
I would be grateful if you could please help me on this. Thanking you in anticipation.