Summary Group Statements Volume 1 Chapter 6

Recognition of A, L, E
Chapter 6:
o If fv differences exist they must be revalued in either
Adjustments Sub records or
Pro formas
o Sub records just add reval surplus
and Sundry Pro Formas for reval
o Every consol the asset must be revalued to value on
Aspects of acquisition
o Income and expenses based on revalued amt
Group Non-dep assets

Statements o Add Reval surplus to consol statements if grew

Sale of non-dep assets not revalued by sub

 Revaluation must be recorded even if sold
 Difference in gain or loss due to difference in cost to group
 The reval forms part of goodwill so does not disappear due to sale
YEAR OF SALE
DR LAND CR REVAL
DR GAIN CR LAND

SUBSEQUENT YEARS
DR LAND CR REVAL
DR RE CR LAND

Revaluation of depreciable assets not revalued in sub books

 Depreciation will be based on revalued amt, differences will arise
DR Asset CR Reval
DR Dep CR Acc Dep
Next year
DR RE CR Acc dep (Sum of dep)



Revaluation of inventory at acquisition date

 At acquisition
DR RE CR Inv
DR Inven CR Cos
 Next year
DR RE @ CR RE since
 PPE as inventory
DR Inventory CR RE
DR CoS CR Inventory (on sale)
Make sure inventory adds up to correct amt

Preference shares