This document is a memorandum addressed to the Board of Directors of Power Ltd, drafted by a graduate accountant, Julia Edwards, to address concerns regarding accounting issues related to a business combination and consolidation. The memo clarifies the application of fair value in consolidation accounting according to FASB and AASB/IFRS standards, emphasizing the importance of fair value for asset and liability valuation. It answers specific questions raised by the board, such as the correct location for fair value adjustments and the appropriate use of equity accounts during asset revaluation. The memo also discusses the indefinite nature of equity accounts and their relevance in financial reporting, referencing various accounting standards and research to support its arguments. The document provides a detailed analysis of the accounting treatments for assets, liabilities, and equity, ensuring that the financial reports are transparent, reliable, and accurately reflect the financial position of Power Ltd.