Summary
Summary Group Statements Volume 1 Chapter 6
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An introduction to Group Statements and group companies
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By: mejean1997 • 3 year ago
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Recognition of A, L, EChapter 6:
o If fv differences exist they must be revalued in either
Adjustments Sub records or
Pro formas
o Sub records just add reval surplus
and Sundry Pro Formas for reval
o Every consol the asset must be revalued to value on
Aspects of acquisition
o Income and expenses based on revalued amt
Group Non-dep assets
Statements o Add Reval surplus to consol statements if grew
Sale of non-dep assets not revalued by sub
Revaluation must be recorded even if sold
Difference in gain or loss due to difference in cost to group
The reval forms part of goodwill so does not disappear due to sale
YEAR OF SALE
DR LAND CR REVAL
DR GAIN CR LAND
SUBSEQUENT YEARS
DR LAND CR REVAL
DR RE CR LAND
Revaluation of depreciable assets not revalued in sub books
Depreciation will be based on revalued amt, differences will arise
DR Asset CR Reval
DR Dep CR Acc Dep
Next year
DR RE CR Acc dep (Sum of dep)
Revaluation of inventory at acquisition date
At acquisition
DR RE CR Inv
DR Inven CR Cos
Next year
DR RE @ CR RE since
PPE as inventory
DR Inventory CR RE
DR CoS CR Inventory (on sale)
Make sure inventory adds up to correct amt
Preference shares
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