The non-controlling interest in the goodwill of the subsidiary

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  1. Avatar of jing jing says:
    April 2, 2013 at 12:18 pm

    Is there anybody can answer my question ? Need help

    I am studying ACCA paper7 Financial Reporting (International and UK stream). I have paid online exam entry.
    I just have got one question when I needed to choose paper standard and variant because there are 3 options. I have chose “International” and I just wonder whether it is correct.

    Thx

    • Avatar of dknowles84 dknowles84 says:
      April 19, 2013 at 6:53 pm

      I’m the same and I chose Internatiional, as that is the syllabus that BPP teach where I was studying. If you are self studying there is no reason why you shouldn’t just do the UK variant – I have heard that it is slightly easier than international for some reason!

  2. Avatar of Mdots Mdots says:
    March 24, 2013 at 7:01 am

    I can’t thank you enough. I wish I were in your classroom. You really cleared up the stuff, that my lecturer explained so complicatedly, into easy steps. Thanks!!

  3. Avatar of henahailu2 henahailu2 says:
    February 8, 2013 at 5:43 am

    Question
    Goodwill impairment is allocated to both parent and non-controlling interest, valued at fair value.
    Let me pick a simple example from 2012 syllabus page 146-147.
    Goodwill 23,000.00
    Attributable to: parent 19,250.00
    NCI 3,750.00
    When goodwill is impaired by 20%, this impairment is allocated according to their percentage of holdings (75%: 25%)
    Impairment Parent (75%) NCI (25%)
    23,000.00 @ 20% = 4,600.00 3,450.00 1,150.00
    ASSUME GOODWILL IS IMPAIRED BY 75%
    23,000.00 @ 75% = 17,250.00 12,937.50 4,312.50
    In this case the deduction of NCI resulted by goodwill impairment (4,312.50) is greater than the goodwill attributed (3,750.00).
    So, is it fair to allocate goodwill impairment according to percentage of holdings?
    My suggestion;
    Impairment Parent NCI
    23,000.00 @ 20% = 4600.00 (19,250.00 X 20%) = 3,850.00 (3,750.00 X 20%) = 750.00
    Does it make sense?

  4. Avatar of henahailu2 henahailu2 says:
    January 4, 2013 at 2:13 pm

    Question?
    the syllabus says “good will can not be developed internally, rather it is valued when business combination occurs”.
    so why do we attribute goodwill to NCI? where they do not develop goodwill internally?

    • Avatar of MikeLittle MikeLittle says:
      January 4, 2013 at 2:40 pm

      @henahailu2, The nci only arises on the event of a business acquisition. Incidentally, I believe that your question is incorrect “…good will can not be developed internally…” and then you go on to say “so why do we attribute goodwill to NCI where they do not develop goodwill internally?”

      The wording of your question suggests that we should not be attributing goodwill because it WASN’T developed internally.

      Where goodwill is internally generated, we DO NOT recognise it. Goodwill is recognised ONLY on the event of a business acquisition and nci arise, again, ONLY on the event of a business acquisition

  5. Avatar of dtsolak dtsolak says:
    November 27, 2012 at 6:40 pm

    Example 6: Page 40, Question: Why do we own 8000 shares if Ilona? We own 25% @ 32.000 $ = 8.000 $ of share capital…Am I wrong??

  6. Avatar of eadinnu2 eadinnu2 says:
    November 15, 2012 at 10:05 pm

    Great lectures. My only regret is that i discovered this site just some 20 days to the exam. Keep the good work going.

  7. Avatar of simbamasara simbamasara says:
    September 21, 2012 at 5:13 pm

    Why is it that we apportion the impairment of goodwill between the parent and the nci but we dont do the same for the goodwill.why does the nci not get part of the goodwill

    • Avatar of MikeLittle MikeLittle says:
      September 21, 2012 at 5:47 pm

      @simbamasara, They do! NCI is measured at “value at date of acquisition + share of post-acquisition retained – their share of goodwill impairment” The value at date of acquisition INCLUDES their share of goodwill at date of acquisition.

      An alternative way of calculating the nci is “their share of S net assets at date of Statement of Financial Position + their share of any goodwill which remains after impairments to date. Check it!

  8. Avatar of celinemoguem celinemoguem says:
    August 21, 2012 at 6:59 pm

    that s umbeliveble it sound so easy,hope it will carry on

  9. Avatar of badmanbrian badmanbrian says:
    August 19, 2012 at 4:13 pm

    U the best. Great Humour to!

  10. Avatar of bayigga bayigga says:
    July 30, 2012 at 10:42 pm

    You really make it seem easy…. thanks Mike.

  11. Avatar of daniuja daniuja says:
    May 19, 2012 at 7:41 pm

    thank you so much!!

  12. Avatar of linjingalice linjingalice says:
    May 6, 2012 at 3:41 pm

    really helpful thanks alot

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