Methods of consolidating subsidiaries

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Contingent consideration is measured at fair value at the acquisition date.Subsequent changes in the fair value of contingent consideration do not generally result in the adjustment of the acquisition-date measurement.This is the second standard dealing with the situation when the investor obtains a control over its investment.As opposed to IFRS 3 mentioned above, IFRS 10 , which could be a joint operation or joint venture.

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Goodwill is tested for impairment once a year to determine whether its carrying amount is recoverable.

In the case of subsidiaries consolidated for the first time, assets and liabilities are measured at their fair value at the date of acquisition.

Their carrying amounts are adjusted in subsequent years.

Acquisition-related costs that are not equity transaction costs are not added to the purchase price, but instead recognized as expenses in the period in which they are incurred.

The consolidation process involves adjusting the items in the separate financial statements of the parent and its subsidiaries and presenting them as if they were those of a single economic entity.

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