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Hello Sir,
For calculating the net asset of subsidiary at acquisition do we have to use the share price(The par value of the share) or fare -market price at acquisition,
really confusing,
Thanks,
Hi,
The net assets of the subsidiary at acquisition are valued at fair value and is done in the net assets working. We take the book value of the assets using the share capital, share premium and retained earnings amounts before then accounting for any fair value adjustments. Fair vale adjustments are usually those in relation to PPE or a contingent liability.
Thanks
Effectively it is as the net assets is equal to the equity. We then make the fair value adjustments to adjust to the most up to date values of the assets/liabilities.
Thanks
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