Changes in the Composition of a Group Example 1

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  1. Avatar of trebreh trebreh says:
    November 13, 2012 at 7:21 pm

    Q. why the carrying value of the 15% not 100 + 24 ((360-200)x15%) ?

  2. Avatar of syedwaqar syedwaqar says:
    October 21, 2012 at 8:22 pm

    HELLO! MR LITTLE

    Sir please let me know if Parents own 55 % and in mid of year it buys further 25% ..AND question says good will is calculated on fair value basis and there is imapirment in year of suppose $1000…so when doing working “3b” we take part of good will as u did (25%/45%) of good will…the goodwill amount to be used for allocation will be post half year imparied amount related to NCI? i.e “impaired goodwill amount” own by NCI * 25%/45%???

    Regards

    • Avatar of MikeLittle MikeLittle says:
      October 22, 2012 at 10:27 am

      @syedwaqar, Hi

      I suppose sensibly that the date of the 1,000 impairment is critical here. If a question were to state for example that “At the end of the year in an impairment review the directors assessed that goodwill should be impaired by $1,000″, then our share of that impairment would be 80% and nci share 20%

      If alternatively the question said that “2 months before the 25% further acquisition, the directors determined that goodwill needed to be impaired by $1,000″ then the allocation would be 55% / 45%

      But that surely would be strange! It’s my understanding that the annual review for goodwill impairment takes place at the end of the financial year. If so, then it’s going to be an 80% / 20% split

  3. Avatar of syedwaqar syedwaqar says:
    October 21, 2012 at 7:56 pm

    HELLO! Mr.Little!!
    Sir please let me know that if parent have initial 15% investment and then it buy’s further 60%….
    there is going to be a gain/loss to PARENT on deemed disposal…that gain/loss is going to be reflected in retained earnings of PARENT….

    Regards

  4. Avatar of Kuso Kuso says:
    February 20, 2012 at 12:46 pm

    HOW DID HE ARRIVE AT FV OF 15% to be 130 000

    • Avatar of sodiqlawal sodiqlawal says:
      March 24, 2012 at 10:23 pm

      @1416785, He did it on a proportional basis based on cost of investment.
      (520,000 / 60% x 15%)
      However he said the fair value of original investment will likely be given in an exam, so you would not need to do this in exam. He forgot to add it to the question

  5. Avatar of dimple dimple says:
    November 24, 2011 at 4:03 pm

    Very good lecture. Thank you for same

  6. Avatar of neilbass neilbass says:
    October 20, 2011 at 12:47 pm

    Hi Admin – is it possible to get a reply to my earlier queries please?
    Thanks

  7. Avatar of admin admin says:
    October 19, 2011 at 11:03 am

    Lecture is starting fine!
    You are supposed to try and do it by yourself, and the tutor jut talks through it!

  8. Avatar of nausheenmoeen nausheenmoeen says:
    October 19, 2011 at 10:18 am

    the lecture is starting from the middle of the example how to start up.

  9. Avatar of neilbass neilbass says:
    October 15, 2011 at 11:13 am

    Hi also in W2 – is there no need to split out the Goodwill between group and NCI any more (previous lectures had the 3 columns approach, NA, US, NCI)? Thanks

  10. Avatar of neilbass neilbass says:
    October 15, 2011 at 10:59 am

    Hi in W2 – if the NCI is valued at $200k, and the NCI have 25% (after A shareholding increases to 75%), couldn’t we then assume total value is $800k (4×25%)? Wouldn’t this then mean the FV of the original 15% would be the balancing figure – ie $80k?

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