Calculate goodwill or not??????????

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  • November 25, 2011 at 8:37 pm #50659
    Avatar of immadahmed
    immadahmed
    Member

    i want to ask that when we are computing net assets in case of step acquisition we do not calculate goodwill but in case of disposal we do calculte goodwill while computing net assets??????

    November 27, 2011 at 1:33 am #90111
    Avatar of kateker
    kateker
    Participant

    When there is not PROPORTIONATE method, which means nci has its goodwill, then we need to include goodwill in computing na.

    November 28, 2011 at 7:25 pm #90113
    Avatar of MikeLittle
    MikeLittle
    Keymaster

    If going from non-subsid to subsid, goodwill is calculated as at the date of acquisition of the subsid. If going from subsid to bigger subsid, involved in the workings is the transfer from the nci of the appropriate part of their goodwill ( which was calculated as at the date we acquired the subsid )

    When going from big subsid to smaller subsid, the reverse is true in that we not only transfer the appropriate share of net assets. We also transfer the appropriate part of goodwill – but only if the nci were originally entitled to goodwill – so only if they were originally valued on a full fair value basis. If they had been originally calculated on a proportional basis, then we won’t transfer any goodwill to them on a part disposal.

    When going from subsid down to associate or lower, we are “losing” all the goodwill we originally had in the subsid.

    Check out chapter 4 in the course notes

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