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Hi, on one of the Open Tuition lectures it was said that in a business acquisition you do not apportion, over time of ownership, revaluation gains, you just consolidate full amount per separate P&Ls. Now I was looking at syllabus example for step disposal and…..revaluation gain has been apportion from the start of the year till disposal date. Per your lectures I assumed it would be ignored as happened after disposal. Could you please advise?
I assume you mean that parent buys subsidiary mid-year, and he subsidiary revalues an asset at the year end. Do we time apportion the revaluation surplus?
I don’t think there is much consistency in practice. Personally, if you want a rule of thumb, I would time apportion.
Remember, in group accounts, any marks given for numbers are for approach, so I wouldn’t get excited either way.