Page 310 - F3 -FA Integrated Workbook STUDENT 2018-19

Chapter 21

Working 2 – Net assets of subsidiary

(W2) Net assets of subsidiary

Acquisition date Reporting date
$000 $000
Share capital (1) X X
Share premium (1) X X
Revaluation surplus (1) X X

Retained earnings (2) X (1) X
(3)
Fair value adjustment (3) X X
(3)
PURP adjustment (if S sells to P) X X
––– –––

X X
––– –––
(to W3)

Key issues

The total of share capital and share premium balances from the
subsidiary SOFP should be unchanged between the date of acquisition
and the reporting date.

There may (or may not) be a fair value adjustment relevant at the date
of acquisition.

There may (or may not) be a provision for unrealised profit (PURP)
adjustment required if sales were made by the subsidiary to the parent.

(1)
Ref = Information in subsidiary SOFP
(2)
Ref = Information in notes to the question

(3)
Ref = Information in notes to question, but often requires calculation.
See more detail in this chapter.

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