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HI
In the june 13 past paper, the proportion method is where the impairment goes to the parent in the retained earnings at full amount. whereas goodwill method is where part if goodwill goes to NCI and part of it goes to retained earnings. Am I right? if so then how come june 13 past paper has included the full amount in the retained earnings?
Yes, as I thought goodwill method involves splitting up impairment wheras portion method doesn’t
Yes! You’re correct.
The last line of point number 2 in the question says “….to measure the non-controlling interest at acquisition at its proportionate share of the fair value of the subsidiary’s net assets”
So, it’s proportionate. And that means that the nci has no goodwill. So any impairment will go in full to the consolidated retained earnings.
I’m not sure that I understand what your problem is – you don’t seem to have a problem – but appear to be making one!
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