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My question is regarding PPE in this question.
Please, see the answers Working 8, and explain me why do we add increase in value of PPE of hail and zinc (24 and1)? These increases are already included in the amounts shown on the balance (60 and 26), right?
I am confused! Please, clarify!Thanks!
In working 2 of net asset..the fair value of net asset of hail is 60..this comprise of 20 of share capital and 16 of retain earning at acq date..so the question said that the balance is fv of land..doing the calculation you willget 60-16-20 = 24 for hail..same thing for zinc..if you don’t understand tell me, i will explain further..
Btw, take note don’t do last past year too much as there is a lot of changes of standard..however the q you asked has not been any changes for tomorrow paper.. 🙂
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No, it hasn’t shown in SOFP. The reason of increase in value of PPE is due to acquirer should access and assign the Fair value to every asset and liability that acquired, which were previously not recognised in the subsidiary book.
The fair value of Net asset that identified in Date of acquisition is 60,
Share Capital (always in norminal value) is 20
Retained Earnings is 16
The increase of net asset then will be the revaluation surplus that acquirer identify, i.e. 24.
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