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Fair value adjustmentIFRS 3 requires that goodwill on consolidation should be based on the fair values of the net assets of the subsidiary company on the date of acquisition.This means that the subsidiary company should revalue its assets on the date of acquisition.But unfortunately no revaluation may have been done. For the purpose of consolidation, it is important to determine what should have been the revaluation gain or loss if an asset is revalued. In most cases we revalue non current assets such as Property, plan nd equipment, intangible assets and long term investments. If there is a revaluation gain on any of the assets then the following entry will be made:a) To record the revaluation gain
DR. Group PPE/intangible assets/Longterm investments (with the full revaluation gain) CR. Cost of control (with holding company share of revaluation gain) CR. M.I (with M.I’s share of the revaluation gain)For assets that are meant to be depreciated or amortized, (PPE and Intangibles), the total depreciation or amortization that should be charged to date should be estimated and provided for .b) Compute the additional depreciation that should have been provided to date had the subsidiaries assets been revalued and record the amount as follows;
DR. Group retained profits (with holding company share of additional depreciation)DR. M.I (with M.I’s share of additional depreciation) CR. Group PPE/Intangible assets (with the full additional depreciation)
Describe the following questions:- Q.1 Explain how financial statements assist in the capital allocation process. How are financial statements limited? Which financial statement
APPORTIONMENT (a) T he purpose of the apportionment rules The purpose of the various rules of apportionment is to provide a fair and reasonable basis for dividing certain
Balance Sheet Preparation with a Missing Element The following data are available for Schubert Products Inc. as of December 31, 2012. Cash . . . . . . . . . . . . . . . . . . . . .
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Distribution to a beneficiary Before distribution to a beneficiary, the investments will be re-valued and the profits or losses divided between the beneficiaries as follows:-
what are the effects of failure to adjust entries
Would you invest in a project that has a net investment of $14,600 and a single net cash flow of $24,900 in 5 years, if your required rate of return was 12 percent?
Financial risk is the likelihood of a company experiencing changes in the level of its distributable earnings as a result of the need to make interest payments on debt finance or p
Q. Estimate cost of equity using dividend valuation model? The cost of equity may be approximate using either the dividend valuation model or the capital asset pricing model. I
given the following information: cash-171,100 accounts receivable-9400 prepaid studio rent-3000 unexpired insurance-7200 supplies-500,equipment-18,000 accumulated depreciation-7200
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