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please let me know the NCI and group reserve treatment of kaplan question pauline sonia and arthur it is confusing me
what should be depreciation treatment should it not be credited to NCI and GRHi,
Unfortunately I do not have access to the question that you are talking about. I only have the BPP materials.
Thanks
now my issue is regarding another question Borough Ltd it shows High(subsidiary at 60% acquired on 1 july 2007) a total of FV of net assets at acq. $120000, RE of 30000 at acq. and SoFP shows (of subsidiary) at year end 30 july 2008
tangible NCA $80000
inventory 30000
rec. 10000
cash at bank 20000sh. capital 75000
RE 50000
Liabilities 15000additional information states-
* FV adjustment in respect of H relates to tangible assets with 5 year life. FV has not been incorporated
* during the year B sold goods to H for $10000 at 50% margin, only 80% goods were sold at year end
* during the year B gave H substantial short term loans of which most were repaid before year end. Final balance of $5000 was paid on 10 july 2008please let me know the amount of goodwill i am confused in FV adjustment
Hi,
Thanks for copying the information to help answer the question but there is still some information required to calculate the goodwill.
The cost of the investment is needed, presumably this will be given elsewhere in the question.
To work out the fair value adjustment we need to know the fair value of the net assets at acquisition, which isn’t included above. We can work out the book value of the net assets as $150,000 (= £120,000 share capital + $30,000 retained earnings) and then we would compare this to the fair value of net assets. The difference is then the fair value adjustment.
If you send over the extra information required then I can fully answer your question. Hope this helps for now.
Thanks
you can get full question at above link page 53 and 54
and thanks for your answer 🙂
Hi,
We are given the fair value of the net assets in the table at the start of the question as $120,000. The share capital is $75,000 (S’s SFP) and retained earnings are $30,000 (same table) at acquisition, which gives us a book value of $105,000 at acquisition. The difference between the book value of $105,000 and $120,000 is the fair value adjustment of $15,000, just a balancing figure.
The cost of the investment was also given in the table at the start as $100,000′ which is then all the info needed to calculate the goodwill.
I hope this answers your question.
Thanks
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