Where the carrying amount of an associate's depreciable assets is lower than their fair values at the date of acquisition, an adjustment is required to be made to restate the assets to their fair values.

Question

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In accounting for an investment in an associate, adjustments for fair value are made at the date of acquisition for the purposes of calculating goodwill or bargain purchase gain. The carrying amount of the associate's assets in the associate's financial statements remains unchanged; adjustments are made in the investor's financial statements to reflect their share of the associate's net assets at fair value only at acquisition.

Where the Carrying Amount of an Associate's Depreciable Assets Is