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CONSOLIDATIONS AFTER THE DATE OF ACQUISITION
Example - depreciable PPE
• A Ltd has held an 80% interest in B Ltd since 2012. Since this date A Ltd
has exercised control over B Ltd.
• On 31 December 2013 B Ltd sold manufacturing machinery to A Ltd for
R20 000.
• The carrying amount of the machinery in the books of B Ltd was R15
000.
• Depreciation is provided for at 20% per annum on the straight-line
method.
• Both entity’s year-ends fall on 31 December.
• Assume a tax rate of 28%.
REQUIRED:
• Prepare the pro forma consolidation journal entries for the years ended
• 31 December 2013 and 31 December 2014.
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