ISSUE: deferred consideration and Contingent consideration.EVIDENCEIFRS 3

ISSUE: COST OF INVESTMENTAccording to IFRS 3 the consideration transferred or cost of investment in the Pariss PLC financial statements is measured at fair value, calculated as the acquisition date fair values of the cash transferred by pariss plc and the liabilities incurred by pariss in this case the deferred consideration and Contingent consideration.EVIDENCEIFRS 3 requires the acquirer to recognise any contingent consideration as part of the consideration for the acquirer. Hence an adjustment took place recognising the liability (contingent consideration) due to the fact it is an obligation. It was recognised at its fair value which is ‘the amount for which an asset could be exchanged, or a liability settled, this is evident from working 1.1.The deferred consideration to be paid on the 31st of Dec 2018 was also recognised at its fair value.ISSUE: LEASED ASSETAccording to IFRS3, the Lease liability is measured at the present value of the future lease payments, including any expected payments at the end of the lease, discounted at the interest rate implicit in the lease. The lease is to be measured based on amortised principles.EVIDENCEThe lease is treated as an operating lease, the rentals should be charged as an expense on a straight line basis over the lease duration and this should be apparent in the statements. More so, the difference between the amount charged to the profit and loss and the cash payment is treated as a prepayment.ISSUE: IMPACT ON GOODWILL AND THE IMPAIRMENT OF GOODWILLAccording to IFRS3, the acquisition of SWP and Angels is to compare the fair value given by the fair value of the consideration given by PARISS plc and the fair value of the NCIEVIDENCEThe appropriate treatment is by pairing the goodwill with the fair value of PARISS PLC with the FV of the net assets of SWP the gross goodwill arising was calculated by matching the fair value of the whole business with the fair value of the net assets at acquisition to give the appropriate goodwill attributable to both PARISS and SWP. This evident by Workings 5.According to IAS 36 ‘Impairment of Assets seeks to ensure that an entity’s assets are not carried at more than their recoverable amount’EVIDENCEAfter the recoverable amount of 6800 was discovered, the recovered amount was then covered with the carrying amount as evident by workings 9ISSUE: CONTINGENT LIABILITYAccording to IAS37 the correct recognition is to be applied to contingent liabilities and additional information should be disclosed in the statements so users may have full knowledge.EVIDENCEThis provision was made in regards to the existing reputation held by SWP. From the existing information it is judged cost can be measured reliably. There is the probable outflow resulting from past events. The provision in this case was 400,000