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Dear Sir,
Could you tell me what would give rise to an “unrecognized non-controlling interest” in the impairment of goodwill working?
Thank you
Hi,
I’ll have a look at the Dec’11 question you are referring to and see what it is all about.
Thanks
Chris
Hi,
The scenario arises because the goodwill in Captive is measured using the partial goodwill method, so once calculated shows P’s share of the goodwill only.
As there has been an impairment review at the year-end we need to value Captive and compare it to its recoverable amount. Captive’s value is based upon its net assets plus goodwill, and it’s here where we can bring in this “unrecognised NCI”.
To get the total value of Captive we need to use the full goodwill and not just the partial goodwill, as has already been calculated. To get the full goodwill we start with the partial goodwill and add on the NCI share of goodwill, which is what they refer to as the “unrecognised NCI”, as it is not shown in the financial statements given we’ve calculated goodwill as the partial method.
To calculate it the current 120.2 represents 80% of the full goodwill, so to get 20% of the full goodwill we need to take 20/80ths of this figure.
Hope this helps.
Thanks
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