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Strategic business reporting sept 18 specimen exam q1 part a (I)

This topic has 1 reply, 2 voices, and was last updated 6 years ago by philipkscollins.

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August 11, 2018 at 1:52 pm #467350
Debbie
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The determined bargain purchase of £8m on acquisition for House was debited to p&l but in the acquisition of Mach determined bargain purchase of £3m is debited to retained earnings
Can anyone let me know why they are different? Am I missing something?
Thank you
August 16, 2018 at 10:45 pm #468177
philipkscollins
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This is due to the property. The fair value is £5m and the CV is only £3m so the PPE essentially needs to be uplifted by 2m Dr PPE CR Retained Earnings. If this makes sense. In the other part nothing was in the revaluation reserve so goes straight to P&L
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