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We calculate goodwill on a proportionate basis as follows
Cost of Investment +Nci % of Net assets -Net assets of sub @acqBut in a technical article,they have done like this
Cost of investment-CI share of net assetsWhich one is correct?
Thanks 🙂
If it is said nci is calculated on a proportionate basis of na then we use partial goodwill method that is there will be no goodwill for nci.
The 1st equation is correct but i dont understand what you wrote for the 2nd one….Anyway the 2nd way to calculate goodwil under partial goodwill method is that you take cost of investment ( the purchase consideration) – ( Percentage acquired by parent X NA) = goodwill
Ok thanks
Thats what ive written for the 2ndIs the 2nd way allowed and will it give the same answer like the 1st one?
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