goodwill calculation

Home Forums ACCA Forum F7 Financial Reporting Forums goodwill calculation

This topic contains 5 replies, has 3 voices, and was last updated by avatar rick73 1 year, 5 months ago. This post has been viewed 336 times

Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts

  • avatar
    charlie31
    Participant
    • Topics: 3
    • Replies: 3

    when calculating goodwill, why do you take 100% of the net assets at DOA and then other times take the parent share. e.g June 10 Picant, the answer takes the full 100% of net assets even though they acquired 75%?


    Avatar of danielglover
    danielglover
    Participant
    • Topics: 13
    • Replies: 97

    You will take 100% of the company’s assets and liabilities to consolidate with the parent.
    However, you will only take your share (75%) of the company’s profit and reserves.


    avatar
    charlie31
    Participant
    • Topics: 3
    • Replies: 3

    In past paper Dec 2008, they take 60% of the net assets, and i cant understand why they sometimes take the parent share and sometimes dont.


    avatar
    rick73
    Participant
    • Topics: 0
    • Replies: 5

    Hi

    If fair value is known then its Cost of investment + Fair value less 100% of sub’s equity

    If fair value is not known (or given) then its Cost of investment less the nci % of equity.

    Regards


    avatar
    charlie31
    Participant
    • Topics: 3
    • Replies: 3

    Hi

    Thanks for helping me.

    when you say fair value, do you mean of the investment and not fair value of assets?


    avatar
    rick73
    Participant
    • Topics: 0
    • Replies: 5

    Hi

    If fair value of the non controlling interest is known then its Cost of investment + Fair value of the non controlling interest less 100% of sub’s equity

    If fair value of the non controlling interest is not known (or given) then its Cost of investment less the % of equity you are aquiring.

    I hope this is a little clearer and besides my last post was incorrect (so please ignore it) with regards to calulating goodwill “if the fair value of nci is not known” apologies for any confusion.

    Regards

Viewing 6 posts - 1 through 6 (of 6 total)

You must be logged in to reply to this topic.