Page 425 - F3 -FA Integrated Workbook STUDENT 2018-19

Answers

Example 2a cont.

(W2) Net assets of subsidiary

Acquisition date Reporting date
$ $

Share capital 50,000 50,000
Share premium N/A N/A

Revaluation surplus N/A N/A
Retained earnings 129,000 169,000
(1)
Fair value adjustment 32,000 32,000
PURP adjustment N/A N/A

––––– –––––
211,000 251,000
––––– –––––

(to W3)

Key issues

(1)
Ref = Information in notes to question, but often requires calculation. In this
example, the adjustment to restate the land to its fair value at the date of
acquisition is $32,000 ($177,000 – $145,000).

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