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SBRWhat effect does perent accounting policy have on subsidiary per-acquistion policy

Ssimmsco15y ago
Assume subsidiary acquire Plant on 1/1/2010 for $3000 and depreciate it over 5 years straight line basis ,on 1/1/2011 Parent acquire the subsidiary and after the acquisition the parent intern to depreciate the asset over 8 years straight line basis. what will be the effect of this changes in the policy on the calculation of the subs net assets for Good-well purpose
MikeLittleMikeLittleTutor15y ago#1
None! the accounting policy of 20% depreciation is valid for subsid assets at date of acquisition. The change in estimate applies to post acquisition period. Parent MAY decide that the fair value of the asset should change as at date of acquisition, and that will change the goodwill calculation.
Former userFormer user15y ago#2
hi all,
Would someone please send me p2 notes as i'm currently stuck!!!
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