1. Avatar of nari says

    I notice in the previous examples , regarding the goodwill working, the NCI is calculated as a % of the net assets consisting of share capital & retained earnings. However, in this question where the share price was increased to $1.65, 40% of the retained earnings was NOT included as part of the NCI value in the goodwill calculation, could you please explain why?

  2. avatar says


    My name is Alicia.

    My question relates to the example 7 on page 41 (Ivona and Guido), were Guido shares were worth $1.65 immediately BEFORE the acquisition by Ivona. I am confused about W2 Goodwill calculation (Fair value of net assets @DOA). Why equity shares have value of $80000? It is not logical for me. Why not 80000 X $1.65 =132000? we are told that Guido shares were worth $1.65 immediately before the acquisition (@DOA). So far everything was clear and easy to understand and now I am a bit lost. Please explain. Many thanks

    • Avatar of MikeLittle says

      @loopheichuen, Is this an Ivona and Guido example? If so, the same basic figures apply with the exception of me changing the basis of the nci calculation and for that reason I’ve changed the figures so that three different answers are arrived at.

      Otherwise there would be a danger that you may think “there are three ways of arriving at the same figure and I’ll just concentrate on the one I find easiest”

      You need to be comfortable in all three full, fair ways as well as with the proportional method

  3. avatar says

    Ivone is paying $100,000 / 42,000 shares => $2.08 / share while the NCI are paying $1.65/share…which would mean that Ivone would end up at consolidation with a G/w of 20,800, OA 250,000 ->Total assets 270,800? Shares 70,000, Ret ears 120,000 and NCI 80,800…i think I m getting it wrong somewhere…

  4. avatar says

    Hi, at example 8/page 42..I can see why you are computing the G/W as you are doing it, but I don t understand at (w2) why you keep saying FV of SNA@doa if you are actually considering the SNA and not the FV of the SNA. In this example the FV of SNA @doa should be 80,000 shares x $1.65/ share, right? :)

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