Company Accounting Report: Acquisition, Equity, and Liabilities

This report provides a comprehensive analysis of company accounting practices, specifically addressing the acquisition of Cargo Ltd by Power Ltd. It delves into the critical aspects of fair value adjustments, asset revaluation, and liability recognition, offering clear explanations and insights into the relevant accounting standards (AASB). The report examines the procedures for recognizing assets and liabilities at fair value, the use of various equity accounts for revaluation, and the fate of these accounts post-acquisition. It clarifies the implications of consolidation, including the treatment of goodwill and the elimination of intra-entity balances. Furthermore, the report addresses the specific queries of Power Ltd's directors, providing a detailed understanding of the accounting implications of the acquisition and ensuring compliance with Australian accounting standards.