Consolidated statement of financial position - part 4
Taught by James Griffiths · AI tutor support included
In this lesson, you'll learn how to handle the more complex adjustments needed when preparing consolidated statements of financial position, specifically focusing on impairment, fair values, and their impact on goodwill and group profits.
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In this lesson
- 0:00 Accounting for groups SFP part two
- 1:30 Understanding impairment and goodwill
- 3:48 Fair value adjustments explained
- 5:58 Fair value calculation worked example
- 8:02 Goodwill calculation with fair values
- 9:32 Impairment and depreciation adjustments
- 11:35 Double entry for impairments and fair values
About this lesson
You'll discover why purchased goodwill must be tested for impairment annually, how to adjust subsidiary assets to fair value at acquisition (which affects the goodwill calculation), and how to account for the resulting depreciation charges in group financial statements. Through a worked example involving the acquisition of a subsidiary, you'll see how these adjustments flow through the consolidated accounts and reduce group profit through both impairment expenses and additional depreciation on revalued assets. This is essential knowledge for SBR and AFM papers, where group accounting questions frequently test your ability to handle these fair value adjustments and post-acquisition adjustments correctly.
Duration: 13m
Transcript
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