Comments

  1. Profile photo of Swati says

    Dear Mike Sir,

    Regarding the doubt of (Ivona & Guido) Page 40, Example 6 (Ch-7):
    Thanks for the clarification. I have now understood all the 3 cases of the nci investment valuation given in eg 6,7 & 8.

    Swati.

  2. Profile photo of Swati says

    Dear Mike Sir,

    In the question (Ivona & Guido) Page 40, Example 6 (Ch-7):
    What do we do of this information? ‘The Ivona directors have valued the goodwill attributable to the NCI at $5,000′.
    Where have we used this figure in solving this question?

    Here’s the full ques:
    Ivona bought 60% of the shares of Guido for $100,000 when the Guido retained earnings were $40,000. The Ivona directors have valued the goodwill attributable to the nci at $5,000. Goodwill has not been impaired since acquisition. At 30 June, 2010, the respective Statements of Financial Position were

    Many thanks,
    Swati Goyal.

    • Profile photo of MikeLittle says

      Hi Swati

      OK, we need to know the value of the nci investment. (We need that in order to work out the goodwill on acquisition) Tell me the figure for the nci investment at date of acquisition and I’ll calculate the goodwill for you.

      Hear from you soon :-)

      • Profile photo of Swati says

        Dear Mike Sir,

        Referring to:(Ivona & Guido) Page 40, Example 6 (Ch-7):

        I am a bit confused with two things actually:

        1) We have not used the amount ‘5000’ in the working 2 (goodwill). So, if we have not used it here, then how & where is this ‘5000’ used?
        2) Secondly, while calculating the ‘Value of nci investment’, we do: 40% of 80000 shares= 32000. Then 32000x $1.65. My question is. how have we calculated this ‘1.65’?

        Thanks,
        Swati Goyal

      • Profile photo of MikeLittle says

        Hi, I’m not surprised that you are confused! You appear to be looking at answers to two different questions at the same time.

        Let’s deal with the $1.65 x 32,000 shares first. That’s actually part of the answer to example 8 on page 42 and has not much relevance to example 6 on page 40. Is that bit ok, now?

        Now, $5,000 goodwill not used anywhere in the answer! Well, it IS in my copy of the notes. And, what’s more, it’s exactly where you would expect it to be – in working W2 Goodwill on page 154.

        I suspect that you have been looking at the wrong answer again as you were with the $1.65 issue.

        Ok?

  3. avatar says

    Mr. Little

    I must say that this will be my first attempt at this paper and after following your lectures i am confident that i will do well. Your ability to simplify is amazing and I honestly wish you were my classroom lecturer here,

    Thank you thus far for making the puzzle worth building ,,,,looking forward to sharing good news when i get results in August …:)

  4. avatar says

    Hi there,

    I am confused as to why the Liabilities (160k + 190K) were not added to the Consolidated Statement of FP of the Ivona group (example 6). The proforma for CS of FP I have been following is this:

    Goodwill (W2) xxx
    Other Assets xxx

    the total of the above two amounts balances off the total of the following amounts:

    Share capital (parent only) xxx
    Retained earnings (W3) xxx
    Nci (W4) xxx
    Liabilities xxx

    Up till now, this hasn’t been a problem. But for the Ivona-Guido example, the ‘Liabilites’ at the end has been completely omitted and the statement balances without it. I am very confused right now. Please explain this!!

    Thank you :)

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