In the answer, W5 calculates the Investment in Associate as 20,000+35%*(18-3)=25,250. I do understand this.
And on P64 of the Notes, the second bullet point under “Statement of Financial Position”, says “in practice, … it’s quicker to calculate the figure as the group’s share of the associate’s net assets at the SoFP date…”
If I follow the quicker way, it would be (2,000+18,000)*35%=7,000.
So I believe there must be sth wrong in my understanding of the sentence. I appreciate a lot if you could kindly advise. Thank you!
Yes, I’ve given up this “quicker” way – the way I do it now is “Value at date of acquisition + share of post acq profits less any impairment”
That makes us ( as the nci in an Associate ) on the same basis as the nci in a subsidiary.
The “quicker” way appears to be missing one line.
It should read: Share of Associate’s net assets plus any premium paid on acquisition in so far as it has not been impaired
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