Meaow! By way of introduction to the response to your question …..

A non-controlling interest is measured for the SoFP as “Value at date of acquisition + share of post-acq retained – share of impairment” and for the CSoI they are measured at

“Their share ofthis year’ssubsidiaryadjusted,time apportioned,translatedprofit after tax”

In your post, you are asking about accounting for an associate. In an associate, we are the nci and I have just established above that this is how we account for ncis

So, for the CSoFP, the investment in the associate is calculated as:-

“Cost of acquisition + share of post-acq retained – any impairment”

and for the CSoI we are measured as follows:-

“Our share ofthis year’sassociateadjusted,time apportioned,translatedprofit after tax”

Note the use of the word ADJUSTED

Your first question “Example 1:At acquisition ….. should we debit Consolidated Reserves and credit Invesment in associate ; as reserves will change by additional depreciation on revalued amount }” — NO, it’s a notional adjustment to the associate’s POST acquisition retained earnings of which we are going to account for our share within consolidated retained earnings and investment in subsidiary.

The assets at date of acquisition are being fair valued at date of acquisition. You cannot anticipate into the future the effect on depreciation and then bring that future effect back into assets at date of acquisition. And you cannot argue that the revalued, fair valued assets should have had more (or

less) depreciation charge in the past. That would be irrelevant because we are being told what the valuation is as at date of acquisition

I don’t know why you are trying to make this so complicated!

Investment in Associate is calculated (again) as “Cost of acquisition + share of post-acq retained – any impairment”

In calculating the post acq retained you could well be faced with an adjustment for “additional depreciation” on an upwards revaluation not recorded within the associate’s records but that’s F7 stuff

This basis for arriving at Investment in Associate …… why are you having problems?

“Cost of acquisition” surely cannot be a problem

“Share of post acquisition retained” may be an issue but that’s simply the F7 way of comparing retained earnings “today” as adjusted for matters such as “fair value adjustments” and “additional depreciation” with retained earnings “yesterday” as adjusted for “fair value adjustments”

And “any impairment since acquisition” should equally be within an F7 student’s abilities