Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

7 IFRS requires extensive use of fair values when recording the acquisition of a subsidiary. Which of the following comments, regarding the use of

image text in transcribed

7 IFRS requires extensive use of fair values when recording the acquisition of a subsidiary. Which of the following comments, regarding the use of fair values on the acquisition of a subsidiary, is correct? A B D 8 The use of fair value to record a subsidiary's acquired assets complies with the historical cost principle The use of fair values to record the acquisition of plant always increases consolidated post- acquisition depreciation charges compared to the corresponding charge in the subsidiary's own financial statements Cash consideration payable one year after the date of acquisition needs to be discounted to reflect its fair value Patents must be included as part of goodwill because it is impossible to determine the fair value of an acquired patent, as, by definition, patents are unique Jack Ltd is a car retailer. On 1 April 2020, Jack Ltd sold a car to Kent on the following terms: The selling price of the car was 25,300. Kent paid 12,650 (half of the cost) on 1 April 2020 and would pay the remaining 12,650 on 31 March 2022 (two years after the sale). Jack Ltd's cost of capital is 10% per annum.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Accounting Principles

Authors: Larson Kermit, Tilly Jensen

Volume I, 14th Canadian Edition

71051503, 978-1259066511, 1259066517, 978-0071051507

More Books

Students also viewed these Accounting questions