Page 230 - FR Integrated Workbook 2018-19
P. 230
Chapter 17
Fair values
2.1 Fair values of consideration
When calculating goodwill in (W3), purchase consideration is measured at fair value.
Method of Payment Measurement Journal
Cash paid Dr Cost of investment (W3)
Cash at
acquisition
Cr Cash
Present value (PV) Dr Cost of investment (W3)
Deferred
cash
Cr Liability
Dr Cost of investment (W3)
Shares at Fair value at acquisition Cr Share capital
acquisition
Cr Share premium
Dr Cost of investment (W3)
Deferred Fair value at acquisition
shares Cr Other components of
equity
Fair value Dr Cost of investment (W3)
Contingent The exam will provide the Cr Liability/Equity
consideration figure, or provide enough
information to calculate it.
Professional fees are expensed to profit or loss.
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