Group Account: Fair Value Adjustment - Revaluation of Asset


Where the assets of the subsidiary are revalued during consolidation and there is revaluation difference, the difference is treated as a pre-acquisition reserve.
The accounting treatment of revaluation difference is shown as follows:
For revaluation surplus,
            Dr:       Assets Revalued
            Cr:       Pre-acquisition reserves
For revaluation deficit,
            Dr:       Pre-acquisition reserves
            Cr:       Assets revalued
Sam Plc acquired 300 million of the ordinary share capital of Ruth Ltd on 1st January, 20x5 when the retained earnings of the latter was N80million. The statements of financial position of the two companies as at 31st December, 20x8 are as follows


Myfatutor

Additional information


1.    A non-current asset which was not depreciated with a book value of N65million was estimated to have a fair value of N88million as at 31st December, 20x8
2.    The fair value of the non-controlling interest was estimated to be N105million at 31st December, 20x8
Required
Prepare the statement of financial position for Sam Plc group as at 31st December, 20x8.
Suggested solution

group structure

consolidation schedule
retained earnings for consolidation

non controlling interest
computation of goodwill on acquisition


aggregation of like items in the separate financial statements

consolidated statement of financial position


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