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While calculating goodwill of Linda in Arta we get 2000, but eliminate the part of goodwill which is attributable to NCI, that is 600, why we do that???
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In BPP study textbook page 313 example 2.4 we do not exclude goodwill attributable to NCI
hi, there are 2 types to calculate the goodwill under IFRS3.
first is purchased goodwill, then the goodwill attributable to NCI will be excluded.
second is full goodwill, then both goodwill to parent and NCI should be calculated.
hopefully i can answer ur question.- Topics: 7
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Like when a parent acquires an existing group, goodwill in SS is considered as a purchased goodwill, otherwise when a group acquires SS it is a full goodwill
Thanks, u helped me a lotyou are welcome.
i wish to ask you about the transaction between sub-subsidiary to subsidiary. it is probable that this question will come out?example. if alpha purchase beta 80% shares and beta purchase gamma 90% share.
therefore,
effective interest in beta parent 80%
NCI 20%
effective interest in gamma parent 80%*90%= 72%
NCI 28%if during the year, gamma sold goods to beta at $100. the cost to gamma is $80. all goods are still in the inventory of beta at the year end. therefore, the unrealized profit is $20. how can we split this 20???
because gamma do not make the profit and this unrealized profit should be split to NCI of gamma, parent of gamma(that is parent of beta and NCI of beta), beta.do u understand my question??
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It is an upstream transaction, and I think it should be dealt in the same way as for “Subsiduary to Parent”.Like post acqusition retained earning in SS should be deducted by PUP and multiplied by effective interest in SS, at the same time Net assets at date of consolidation in SS should be deducted by PUP multiplied by NCI’s share (28 %)
It would look like in this way
Debit Retained Earning (20*0.72)
Debit NCI(20*0.28)
Credit Inventory 20
I hope it is right;)en, your answer is same as what i expected before. thanks for the replying. let us work hard together to achieve a pass in this december exam. gambateh!!
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