Required: Determine the amount of borrowing costs to be capitalized and expensed
Required:
1. Determine the acquisition date.
2. Calculate goodwill or gain on bargain purchase if any using Proportionate of Net Assets Method
3. Calculate goodwill or gain on bargain purchase if any using Fair Value Method
Required: Prepare a consolidated account for the group that ended 28th February 2020.
Based on the information above, do a table of content including the introduction and conclusion.
Table of Contents:
1. Introduction
- Background information
- Purpose of the report
2. Acquisition Date
- Explanation of the acquisition date determination
- Calculation of the acquisition date
3. Calculation of Goodwill or Gain on Bargain Purchase using Proportionate of Net Assets Method
- Explanation of the Proportionate of Net Assets Method
- Calculation of Goodwill or Gain on Bargain Purchase
4. Calculation of Goodwill or Gain on Bargain Purchase using Fair Value Method
- Explanation of the Fair Value Method
- Calculation of Goodwill or Gain on Bargain Purchase
5. Preparation of Consolidated Accounts for the Group
- Overview of the group's financial information
- Steps involved in preparing the consolidated accounts
- Detailed preparation of Consolidated Accounts for the Group as of 28th February 2020
6. Conclusion
- Summary of findings
- Recommendations (if applicable)
- Final thoughts
Note: The table of contents provided above is a general outline based on the given information. You may need to adapt and modify it according to the specific details and requirements of your task.
Required: Determine the amount of borrowing costs to be capitalized and expensed
Required:
1. Determine the acquisition date.
2. Calculate goodwill or gain on bargain purchase if any using Proportionate of Net Assets Method
3. Calculate goodwill or gain on bargain purchase if any using Fair Value Method
Required: Prepare a consolidated account for the group that ended 28th February 2020.
Based on the information above, do an introduction and conclusion.
Introduction:
The purpose of this report is to determine the amount of borrowing costs to be capitalized and expensed for a specific company. Additionally, we will determine the acquisition date, calculate the goodwill or gain on bargain purchase using both the Proportionate of Net Assets Method and the Fair Value Method, and prepare a consolidated account for the group that ended on 28th February 2020.
Acquisition Date:
The acquisition date refers to the date on which a company acquires control over another company. In order to determine the acquisition date, we need detailed information regarding the specific acquisition in question. Once we have access to this information, we will be able to identify the exact date on which the acquisition took place.
Calculation of Goodwill or Gain on Bargain Purchase using the Proportionate of Net Assets Method:
The Proportionate of Net Assets Method is a commonly used approach to calculate goodwill or gain on bargain purchase. It involves comparing the fair value of net assets acquired with the purchase price paid. If the purchase price exceeds the fair value of net assets, goodwill is recorded. On the other hand, if the fair value of net assets exceeds the purchase price, a gain on bargain purchase is recognized.
Calculation of Goodwill or Gain on Bargain Purchase using the Fair Value Method:
The Fair Value Method is another commonly used approach to calculate goodwill or gain on bargain purchase. This method involves determining the fair value of both assets and liabilities of the acquired company at the acquisition date. The difference between the fair value of net identifiable assets and the purchase price paid represents either goodwill or a gain on bargain purchase.
Consolidated Account for the Group:
In order to prepare a consolidated account for the group that ended on 28th February 2020, we will need access to the financial information of all the subsidiaries or entities included within the group. This information will be used to combine the financial statements of all the entities into one single report, reflecting the financial position and performance of the entire group.
Conclusion:
In conclusion, this report aims to determine the borrowing costs to be capitalized and expensed for a specific company. Additionally, we will identify the acquisition date, calculate the goodwill or gain on bargain purchase using the Proportionate of Net Assets Method and the Fair Value Method, and prepare a consolidated account for the group that ended on 28th February 2020. The findings and calculations presented in this report will provide valuable insights into the financial aspects of the company and the group as a whole.
Table of Contents:
1. Introduction
2. Determination of the acquisition date
3. Calculation of goodwill or gain on bargain purchase using the Proportionate of Net Assets Method
4. Calculation of goodwill or gain on bargain purchase using the Fair Value Method
5. Preparation of consolidated accounts for the group ending on 28th February 2020
6. Conclusion
Introduction:
In this report, we will focus on determining the acquisition date, calculating goodwill or gain on bargain purchase using two different methods, and preparing consolidated accounts for a group that ended on 28th February 2020.
1. Determination of the acquisition date:
To determine the acquisition date, you would need to review the relevant agreements and documents related to the acquisition. Look for the specific date on which the control of the acquired entity was obtained by the acquiring company. This date is crucial for subsequent calculations.
2. Calculation of goodwill or gain on bargain purchase using the Proportionate of Net Assets Method:
To calculate goodwill or gain on bargain purchase using this method, you would need the fair values of all identifiable net assets acquired. Determine the proportionate share of these net assets based on their fair values and compare it to the acquisition cost. If the acquisition cost exceeds the proportionate share of net assets, it results in goodwill. If the acquisition cost is lower, it implies a gain on bargain purchase.
3. Calculation of goodwill or gain on bargain purchase using the Fair Value Method:
Under the Fair Value Method, determine the fair values of all identifiable net assets acquired, including property, plant, and equipment, intangible assets, and liabilities. Calculate the net assets acquired by deducting liabilities from the fair value of assets. Compare the net assets acquired with the acquisition cost to determine goodwill or gain on bargain purchase.
4. Preparation of consolidated accounts for the group ending on 28th February 2020:
To prepare the consolidated accounts, gather the financial statements of all the subsidiaries within the group. Eliminate any intercompany transactions and adjust for any intra-group balances or unrealized profits. Consolidate the financial statements using the appropriate consolidation method, whether it is the pooling of interest method or the acquisition method.
Conclusion:
In conclusion, determining the acquisition date, calculating goodwill or gain on bargain purchase using two different methods, and preparing consolidated accounts are essential steps in the financial reporting process for a group. The information obtained from these steps provides valuable insights into the financial position and performance of the group as a whole. It is crucial to ensure accuracy and compliance with accounting standards, as these figures impact decision-making and financial analysis.
Table of Content:
1. Introduction
2. Determining the amount of borrowing costs to be capitalized and expensed
2.1 Acquisition Date and Goodwill Calculation using Proportionate of Net Assets Method
2.2 Goodwill Calculation using Fair Value Method
3. Preparation of Consolidated Accounts for the Group
3.1 Consolidated Account for the Group as of 28th February 2020
4. Conclusion
1. Introduction:
In this report, we will discuss the determination of borrowing costs to be capitalized and expensed, along with the calculation of goodwill or gain on bargain purchase using different methods. Additionally, we will prepare a consolidated account for the group as of 28th February 2020.
2. Determining the amount of borrowing costs to be capitalized and expensed:
To determine the borrowing costs to be capitalized and expensed, the following steps can be followed:
2.1 Acquisition Date and Goodwill Calculation using Proportionate of Net Assets Method:
To calculate the goodwill or gain on bargain purchase using the Proportionate of Net Assets Method, follow these steps:
a. Determine the acquisition date - this is the date when the acquisition of assets and liabilities occurred.
b. Calculate the proportionate net assets - add up the fair value of identifiable assets and liabilities, and compute the difference.
c. Apply the proportionate net assets to calculate goodwill - subtract the proportionate net assets from the consideration paid to compute goodwill or gain on bargain purchase.
2.2 Goodwill Calculation using Fair Value Method:
To calculate the goodwill or gain on bargain purchase using the Fair Value Method, follow these steps:
a. Determine the fair value of the identifiable assets and liabilities.
b. Subtract the fair value of identifiable assets and liabilities from the consideration paid to compute goodwill or gain on bargain purchase.
3. Preparation of Consolidated Accounts for the Group:
To prepare a consolidated account for the group as of 28th February 2020, gather the financial statements of the subsidiaries and perform the following steps:
a. Eliminate intercompany transactions and balances.
b. Add together the balances of similar accounts from the subsidiaries' financial statements.
c. Adjust for any non-controlling interests.
d. Present the consolidated accounts, including the income statement, balance sheet, and cash flow statement.
3.1 Consolidated Account for the Group as of 28th February 2020:
Prepare a consolidated income statement, balance sheet, and cash flow statement for the group, incorporating the financial information of all subsidiaries as of 28th February 2020. Ensure all intercompany transactions and balances are eliminated, and any necessary adjustments are made.
4. Conclusion:
In conclusion, determining the amount of borrowing costs to be capitalized and expensed involves identifying the acquisition date and calculating goodwill or gain on bargain purchase using the Proportionate of Net Assets Method or the Fair Value Method. Additionally, preparing a consolidated account for the group requires eliminating intercompany transactions, combining financial statements, adjusting for non-controlling interests, and presenting the consolidated accounts.