Recognition of Assets at Fair Value and Revaluation of Assets in Financial Accounting and Reporting

FINANCIAL ACCOUNTING AND
REPORTING

TABLE OF CONTENT
oIntroduction
oWhether adjustment to fair value to be made in consolidated worksheet or accounts
of Cargo Ltd.
oEquity accounts used during revaluation of asset at acquisition
oExistence of equity accounts used during revaluation of asset at acquisition
oConclusion

INTRODUCTION
AASB 3 specifies provision relating to transactions or event meets
the definition of business combination. The acquirer is require to
ascertain the acquisition date on which it obtains the control.
Present report provides discussion relating to recognition of events
relating to acquisition. Further, recognition of revaluation of asset
has also been discussed in detail along with its accounting
treatment.

ISSUE1: WHETHER ADJUSTMENT TO FAIR VALUE
METHOD TO BE MADE IN CONSOLIDATION
WORKSHEET OR IN BOOKS OF CARGO LTD.
oNo specific regulation is available relating to recognition of adjustment of
fait value.
oAsset and liabilities are required to be recognized at fair value.
oRecognition of adjustment in consolidation worksheet is more appropriate.