IF a company was operating under the name A with shareholders X and Y, in 2008 the shareholders sold 40% of the company to Mr, Z and they changed the name of the company to be B the company is Printing press so has significant Fixed assets Value.
As per IFRS , it is acceptable that the new company B , Book on the new TB the value of Fixed assets Cost , as the net book value on the acquisition date , IF the machines were not evaluates by an official evaluator ??? they can consider the evaluation as the amount paid on the acquisition date and start the depreciation from that time??? , Or they have to continue with the same FA register ?? plz note they just bought 40% of the equity
First thing, the company is renamed from A to B so there is no new company. The fixed assets should be consistently accounted for, a change in shareholders does not affect the accounting principles of the company – sec.
It is possible that the 40% owner revalued fixed assets of company B (formerly known as company A), but that is only for their accounting purposes, for example to record the net equity value of the company as a n investment in related companies in the company Z is using to won the 40%.
But as said, a change in shareholders does not affect the accounting policies of the company – sec, if a company becomes part of a group by a change in shareholders (for example a sale of 75% of the shares to a group of companies), that group may require to prepare a consolidation return for inclusion in their consolidated accounts, this will be based on the group’s accounting principles and the fixed assets will be revalued in the acquisition process, the revalued amount is cost to the group, however the acquired company will consistently continue to value the fixed asset at their original cost, i.e. there will be two sets of accounts, a consolidation return (i.e. special purpose financial statements) and the original local statutory financial statements.
Hope this is of assistance,