Page 472 - F2 Integrated Workbook STUDENT 2019
P. 472
Chapter 19
Chapter 14
Example 14.1
(W1) Group Structure
P owns 60% NCI = 40%
Acquisition dates:
– 35% 31 Dec 20X1
– 25% 31 Dec 20X4
Stardust becomes a subsidiary of Ziggy from December 20X4. This is a step-
acquisition where control is achieved. Consolidation only occurs from 31
December 20X4 (4 years).
Ziggy must treat the step-acquisition as if they sold the original holding (35%)
and bought back the entire holding in one go (60%).
The 35% investment will need to be re-measured to fair value
Dr Investment (79,000 – 67,500) 11,500
Cr Profit (credit to group retained earnings) 11,500
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