More Complex Group Structures Example 2

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  1. avatar says

    Dear Sir, why do we take 70% x 55% of 160,000 Net Assets of Arta when calculating goodwill? shouldn’t we take the whole amount of 160,000 as fair value of NA acquired? if 60% x 55% of 160,000 is correct,then why don’t we do the same for Linda 70% x 300,000?

  2. Profile photo of rooman says

    In above question …While calculating Maija’s share in arta u speak an anternative method to calculate this same thing with another method which is much simpler than the first one…BPP states first method but do examiner also likes the first method?

    • Profile photo of MikeLittle says

      @rooman, It’s not the examiner who matters in that context – it’s the markers. But whether it’s the examiner or the markers, you can rely on the fact that they are totally familiar with both methods

  3. avatar says

    Hi. Just a quick question here. Why you have not valued the net assets of Linda at the date of acquisition at fair value which would be $ 1.8 x Total number of shares and hence the goodwill be $48000 instead of your $108000. Can you help me with that kindly. Thank you.

  4. Profile photo of bahram says

    but when linda bought arta, the net assets weren’t 160,000, because the retained earning when linda bought arta were 115,000. so howcome u came up with net assets worth 160k when they should be 150k, therefore goodwill 7500, and 70% of that is 5250 :/
    HELP !

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