A Ltd acquired all of the issued shares of B Ltd. When preparing the consolidated financial...
A Ltd acquired all of the issued shares of B Ltd. When preparing the consolidated financial statements, fair value adjustments relate to:
a. differences between fair value and carrying amount of the parent’s identifiable assets and liabilities
b. differences between fair value and cost of the subsidiary’s identifiable assets and liabilities to the extent attributable to the non-controlling interest
c. differences between fair value and cost of the subsidiary’s identifiable assets and liabilities to the extent attributable to the parent entit
d. differences between fair value and carrying amount of the subsidiary’s identifiable assets and liabilities
Homework Answers
The correct answer is "d. differences between fair value and carrying amount of the subsidiary’s identifiable assets and liabilities".
Since A Ltd. has acquired all of B Ltd's issued shares, fair value adjustment in this case would relate to the differences between fair value and carrying amount of the subsidiary's identifiable assets and liabilities. Since 100% of B Ltd. has been acquired by A Ltd. there is no need to account for the differences only to the extent attributable either to the non-controlling interest or the parent entity.
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A Ltd acquired all of the issued shares of B Ltd. When preparing
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