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Hi Tutor, as we know that we recognize net identifiable assets in Sco in goodwill calculation
If for instance, my inventory NRV was 50 at acquisition date and 60 at date reporting.
Do i include 50 in net identifiable asset of S co? and its difference will be broken down into to GRE and NCI calculation?
Did i get it right?
WHAT!!!!!
Net assets at date of acquisition are never given in the form of individually broken down figures. You’ll not find a figure for PPE, for Investments, for Inventory, Receivables nor Cash. There will be no information about long and short term liabilities
So where do you think you are going to find this figure of 50 for inventory?
Go back to F3 where you learned that net assets = capital employed and, in a company context, capital employed = shareholders’ funds
Shareholders’ funds comprise share capital, share premium and other reserves including retained earnings
This line of yours “If for instance, my inventory NRV was 50 at acquisition date and 60 at date reporting” suggests to me that you’ve not fully appreciated the importance of the basic equation:
Net assets = Capital employed
OK?
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