Homework Help is Here – Start Your Trial Now!
Business
Accounting
a) Explain the concepts: Single Entity Concept, Control and Fair value.

a) Explain the concepts: Single Entity Concept, Control and Fair value.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
a) Explain the concepts: Single Entity Concept, Control and Fair value. b) Paul acquired 75% of the share capital of Simon on 1 January 2011. On this date the net Assets of Simon were Tk. 80,000. The Non-controlling interest was calculated using the fair value method, which was calculated as Tk.40, 000 at the date of acquisition. At January 2013 the net assets of Simon were Tk. 120,000 and goodwill had been impaired by Tk. 10, 000. Required: What was the value of Non-controlling interest at 1 January 2013? What will be the accounting treatment of a non-controlling interest? c) On 30 September 2011, GHI purchased 100% of the ordinary share capital of JKL for Tk. 1.8 million. The book value of JKL's net assets at the date of acquisition was Tk. 1.35 million. A valuation exercise showed that the fair value of JKL'S property, plant and equipment at the date was 100,000 greater than book value and JKL immediately incorporated this revaluation into its own books. Required: Calculate goodwill on acquisition in accordance with IFRS 3 Business Combinations. What will be the accounting treatment of goodwill?
Transcribed Image Text:a) Explain the concepts: Single Entity Concept, Control and Fair value. b) Paul acquired 75% of the share capital of Simon on 1 January 2011. On this date the net Assets of Simon were Tk. 80,000. The Non-controlling interest was calculated using the fair value method, which was calculated as Tk.40, 000 at the date of acquisition. At January 2013 the net assets of Simon were Tk. 120,000 and goodwill had been impaired by Tk. 10, 000. Required: What was the value of Non-controlling interest at 1 January 2013? What will be the accounting treatment of a non-controlling interest? c) On 30 September 2011, GHI purchased 100% of the ordinary share capital of JKL for Tk. 1.8 million. The book value of JKL's net assets at the date of acquisition was Tk. 1.35 million. A valuation exercise showed that the fair value of JKL'S property, plant and equipment at the date was 100,000 greater than book value and JKL immediately incorporated this revaluation into its own books. Required: Calculate goodwill on acquisition in accordance with IFRS 3 Business Combinations. What will be the accounting treatment of goodwill?
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Revenue Recognition
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS