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Is goodwill impaired a form of a liability to both the NCI and parent ? And why is goodwill impaired not charged to NCI when it is valued by the parent on proportional basis.
Also, share premium , is there any reason why this does not form part of the agregate to the pre acq of the Subsidiaries since other items such as retained earnings, depreciable NCA and non depreciable NCA form part of the pre acq figure ?
Also, you included purp and excess depreciation on CoSFP , does it matter if I just added that 5 without deducting purp and then add the excess dep since they will still give same figure . This was found in transfer of NCA we have done the working where purp on transfer was 10 less the excess dep of 5 = 5
If the nci is valued on a fair value basis, any impairment of goodwill is allocated against the parent and the nci according to their relative share-holdings
If the nci is valued on a proportional basis ie their value equates to their share of the identifiable fair valued assets of the subsidiary on acquisition, then they are not credited with any goodwill in their valuation so no impairment of goodwill can be allocated to the nci
“Also, share premium , is there any reason why this does not form part of the agregate to the pre acq of the Subsidiaries since other items such as retained earnings, depreciable NCA and non depreciable NCA form part of the pre acq figure ?
”You are very confused!
Retained earnings is part of shareholders’ funds (as also is share premium) and shareholders’ funds (a credit aggregate) always equals net assets (a debit aggregate)
It is most unusual (I can’t remember a single instance) for an exam question to have a share premium account in the subsidiary. You may be confusing the share premium that probably arises where the parent acquires the subsidiary and pays, in whole or in part, by an issue of the parent’s shares at a premium. But that share premium is in the parent’s records, not the records of the subsidiary
Don’t you think that it would have been helpful if you had told me which question you were looking at!!
“does it matter if I just added that 5 without deducting purp and then add the excess dep”
No, it doesn’t matter. I show them separately because I thought that it was clearer for students to follow what I was doing
OK?
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