Question 3

Tamarama Ltd acquires $100% of Bronte Ltd on 1 July 2013. Tamarama Ltd pays the shareholders of Bronte Ltd the following consideration:

Cash: $70000

Plant and equipment: fair value $250000; carrying amount in the books of Tamarama Ltd $17000

Land: fair value $300000; carrying amount in the books of Tamarama Ltd $200000

There are also legal fees of $35000 involved in acquiring Bronte Ltd.

On 1 July 2013 Bronte Ltds statement of financial position shows total assets of $700000 and liabilities of $300000. The fair value of the assets is $800000.

Required:

1. Has any goodwill been acquired and, if so, how much?
2. Can Tamarama Ltd revalue the goodwill upwards in a subsequent period?