A acquired 30 per cent of the issued capital of B for EUR 1m on 31 December
Question:
A acquired 30 per cent of the issued capital of B for EUR 1m on 31 December 2007. The retained earnings at that date were EUR 2m. A appointed three directors to the board of B. A intends to hold the investment for a significant period of time. The entities prepare their financial statements to 31 December each year. The abbreviated balance sheet of B on 31 December 2009 follows:
B had made no new issues of shares since the acquisition of the investment by A. The recoverable amount of net assets of B is deemed to be EUR 7m. The fair value of the net assets. at the date of acquisition was EUR Sm. What amount should be shown in A’s consolidated balance sheets as at 31 December 2009 for the investment in B? :
Step by Step Answer:
Advanced Financial Accounting An International Approach
ISBN: 9780273712749
1st Edition
Authors: Jagdish Kothari, Elisabetta Barone