Page 256 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Chapter 13

1.3 FV of subsidiary’s net assets at acquisition

On consolidation, the subsidiaries net assets must be valued at FAIR VALUE (FV).

The assets in the subsidiaries individual accounts will be shown at CARRYING
VALUE (CV).

CV does not always equal FV

FV adjustments will be required on consolidation.

Fair value adjustments will be commonly required for:

 property plant and equipment

 intangible assets

 contingent liabilities.

248