Revaluation in consolidation

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June 5, 2016 at 3:47 pm #319633
Anuja Nair
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For consolidation questions, for example,

If we have a revaluation of parent’s/subsidiary’s property of $300.

The standard adjustment would be to:
+300 to PPE,
+300 to other comprehensive income
+300 to revaluation surplus

This would apply regardless of whether the revaluation is on parent’s or subsidiary’s property always right ? It doesn’t depend on whether they are included in the fair value of net assets table right ?
June 5, 2016 at 4:06 pm #319637
MikeLittle
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If you are going to continue to insist on using tables for net assets, then the revaluation MUST appear in that table! Of course it must – it’s an increase in net assets

Of course, this only applies if it’s a revaluation in the subsidiary because I assume that you don’t prepare a net asset table for the parent

If it’s a post-acquisition increase in the net assets of the subsidiary, it must appear in the net asset table “as at reporting date” and the nci will also be given credit for their share of this increase

OK?
June 5, 2016 at 4:40 pm #319652
Anuja Nair
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Okay. So if its a revaluation on a parent’s property, the adjustments will just be,

+300 to other comprehensive income
+300 to revaluation surplus
We dont have to +300 to PPE right ?

Also do we have to account for this in the group RE since its a revaluation on the Parent’s property ?
June 5, 2016 at 6:51 pm #319670
MikeLittle
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“+300 to other comprehensive income
+300 to revaluation surplus
We dont have to +300 to PPE right ?”

WHAT???? Where’s your double entry?

“Also do we have to account for this in the group RE since its a revaluation on the Parent’s property ?”

Technically, no, you are correct. But you DO have to reflect it / account for it in Consolidated Revaluation Reserve
June 6, 2016 at 1:44 am #319707
Anuja Nair
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Sorry. You said that i’m correct on which part , my adjustments or the part where i ask if we have to account for the revaluation on Parent’s property in the group retained earnings ?
June 6, 2016 at 5:25 am #319724
MikeLittle
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“or the part where i ask if we have to account for the revaluation on Parent’s property in the group retained earnings ”

That part.

The parent’s revaluation shouldn’t go to retained earnings, technically. But it should go to Group Revaluation Reserve
June 6, 2016 at 1:11 pm #319854
Anuja Nair
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Okay so in summary. These are the adjustments for the revaluation on parent’s property right?

+300 to PPE,
+300 to other comprehensive income
+300 to revaluation surplus
June 6, 2016 at 4:25 pm #319894
MikeLittle
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Yes, that’s correct
June 6, 2016 at 5:02 pm #319917
Anuja Nair
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Thank you so much for answering all my queries so far. And very sorry if i had made troubled you with too many questions.
June 6, 2016 at 7:09 pm #320012
MikeLittle
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Anuja, we set out our stall to answer questions from students and no-one is counting how many you ask – we shall reply if we are still able to!

Good luck tomorrow!
June 7, 2016 at 2:07 am #320111
Anuja Nair
- Topics: 365
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Thank you so much!
June 7, 2016 at 6:02 am #320145
MikeLittle
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You’re welcome
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