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CONSOLIDATIONS AFTER THE DATE OF ACQUISITION

Revision Example 2

Additional information

1. Auto Ltd acquired 120 000 ordinary shares in Mobile Ltd on

1 January 2014. The retained earnings of Mobile Ltd at this

date were R47 000 and there were no other reserves. Auto

Ltd has controlled Mobile Ltd since 1 January 2014.

2. On the date of acquisition, the land and buildings of Mobile

Ltd with a carrying amount of R120 000 were revalued to

R140 000. No entries relating to the revaluation were made in
the books of Mobile Ltd. (All tax implications relating to the

revaluation can be ignored.)

3. At the above acquisition date there were no unidentified
assets, liabilities or contingent liabilities, and the fair values of

all assets, liabilities and contingent liabilities were confirmed

to be equal to the carrying amounts thereof, with the

exception of the assets mentioned in additional information 2.

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