1. avatar says

    hello sir… where did u learn teaching techniques ???? the way u explain is the safest and easiest way to understand any hard part of question… u r the man……. wow..thank you..

    • Profile photo of MikeLittle says

      Hi, I don’t have the notes handily available at the moment but, do I not remember that I say immediately before, “now let’s assume that the shares are worth $XXXX” and that will give me the $52,800?

      • avatar says

        It’s the Ivona and Guido question, example 6 with requirement:

        Prepare the consolidated SOFP as at 30 June,2010.

        It’s with working 2 that I’m confused with sir.

        For value of nci investment, you did 40% x 80000 shares which equals to 32000 shares @ 1.65$ each. It’s the 1.65$ each part I didn’t understand where you got it from?

        This consolidation chapter is a bit tough, but I won’t let it affect me, I’ll keep on practicing till I get a good grasp of it :)

      • Profile photo of MikeLittle says

        is it not simply the value of the nci (53,000) divided by the number of shares held by the nci (32,000)?

        It sounds like a throw-away line that I’ve mentioned as I was calculating the total goodwill.

        The $1.65 is not integral to the question – it’s simply a little bit of “extra” information that we can derive from the figures as they work out. In fact, the more correct value would be 53,000 / 32,000 = $1.65625

  2. Profile photo of chandhini says

    hmm.. Why have we not charged any impairment of GW to NCI? Is it because we took the NCI of the Share Capital and multiplied it with the share price, so in effect it means that NCI is a % of the Subsidiary’s Net Assets? Please throw some light on this!

  3. Profile photo 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?

  4. 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

    • Profile photo 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

  5. 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…

  6. 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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