High, a parent company, acquired Low, an unincorporated entity, for $2,800,000. A fair value exercise performed on Low's net assets at the date of purchase showed: $'000 Property, plant and equipment 3,000 Identifiable intangible asset 500 Inventory 300 Trade receivables less payables 200 4,000 How should the purchase of Low be reflected in High's consolidated statement of financial position? Record the net assets at their values shown above and credit profit or loss with $1,200,000 Record the net assets at their values shown above and credit High's consolidated goodwill with $1,200,000 Write off the intangible asset ($500,000), record the remaining net assets at their values shown above and credit profit or loss with $700,000,000 Record the purchase as a financial asset investment at $2,800,000
High, a parent company, acquired Low, an unincorporated entity, for $2,800,000. A fair value exercise performed on Low's net assets at the date of purchase showed:
|
|
$'000 |
|
Property, plant and equipment |
3,000 |
|
Identifiable intangible asset |
500 |
|
Inventory |
300 |
|
Trade receivables less payables |
200 |
|
|
4,000 |
How should the purchase of Low be reflected in High's consolidated
-
Record the net assets at their values shown above and credit profit or loss with $1,200,000
-
Record the net assets at their values shown above and credit High's consolidated
goodwill with $1,200,000 -
Write off the intangible asset ($500,000), record the remaining net assets at their values shown above and credit profit or loss with $700,000,000
-
Record the purchase as a financial asset investment at $2,800,000
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