Comments

  1. avatar says

    what if the subsidiary has a loss in its profit and loss account?
    what if the subsidiary has retained loss in its financial position?

    relating to the above, how should i calculate the goodwill and consolidated retained profit/loss?

    • Profile photo of MikeLittle says

      What’s the problem? “Retained earnings at date of acquisition” means ….. retained earnings at date of acquisition!

      If that’s negative, then put it in as a negative!

      I really don’t see what your problem is

      Does that answer you?

  2. avatar says

    I understand goodwill is applied once at the start and the reason for it. I do not understand the logic of goodwill impairment also how do you decide the %of it as sometimes it’s 10%and other times as high as 80%.

  3. avatar says

    Dear sir,
    In eg 1. you did not deduct preacquistion of $10,000, however in example 4 you deducted preacquistion of $5000.00. I am confused since both questions the dates of acquistion and year end is the same? Can you clarify.

    With thanks

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