Consolidation of new group

Consolidation of new group

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Company A acquires Company B part way through the year. So we require a set of consolidated accounts. The Group Fixed asset note is the problem. I am advised that both sets of fixed assets should be shown under additions at their NBV or fair value in the group FA note. This means that cost of assets in the group note is substantially lower than cost of assets in the company note. Obviously there is a similar divergence in depreciation but its the cost that will require explaining to an amateur board. Why can't we bring in it into the note as cost and depreciation thereby maintaining  the similarity with the company note? Reference to statute or FRS or whatever would be helpful.

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By johngroganjga
16th Sep 2014 11:15

Not sure what you mean by "both sets of fixed assets".  The holding company's fixed assets are already in its own balance sheet.  The only issue to consider is the introduction of the new subsidiary's fixed assets at the date of acquisition, which should be at fair value.

If you don't bring them in at fair value your goodwill figure will be wrong.

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By TerryD
16th Sep 2014 11:25

You don't restate the holding company's own fixed assets - but if their NBV is that different from fair value, maybe you should consider impairment?

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