Hello sir. I have a question for you. In the NCI lecture you told that the formula to measure NCI for fair value method was NCI% x S Shares in issue x S share value. But u used a different formula to solve this question when calculating NCI. Please elaborate. Thanks

I guess it is because it was used FV method. If we include nets assets (equity shared capital + retained earnings) it would be proportionate share of net assets method.

Can someone explain to me why we don’t include share capital in the calculation? I try to relate with example 3 where we need to add net asset figure (share capital + retained earnings). Is it because the share capital balance remained unchanged since the acquisition?

Hi why the full goodwill cannot be calculated as: 1380/75%-(1000+480)=360 as 1380/75%=1840 stands for the total FV of the Erica as of Jan-20X3, and (1000+480) is the total book value of net assets of Erica as of Jan-20X3, so the difference should be the total good will

I guess it is because i did not use the NCI=450 as of Jan-20X3, but I still get confused why there is the difference?

How is it that we used the Fv method when it didnt say it in the question? I thought we were to assume that we are going to use proportional method unless stated otherwise?

mohammadahmad says

Hello sir. I have a question for you. In the NCI lecture you told that the formula to measure NCI for fair value method was NCI% x S Shares in issue x S share value. But u used a different formula to solve this question when calculating NCI. Please elaborate. Thanks

shadrecklongadi says

Why weren’t the net assets used to calculate the NCI in b?

Radoslav says

I guess it is because it was used FV method. If we include nets assets (equity shared capital + retained earnings) it would be proportionate share of net assets method.

syedtaha13 says

Can someone explain to me why we don’t include share capital in the calculation? I try to relate with example 3 where we need to add net asset figure (share capital + retained earnings). Is it because the share capital balance remained unchanged since the acquisition?

syedtaha13 says

This is relating to NCI @ 31Dec 2019

Lugendran says

the Total Assets are : 6900

Total E + L = 6755 ( 2000 + 2175 + 2580)

It did not balance sir. Please to clarify me on this sir. Thank you

matthewthomas0123 says

Hi,

You are not including the NCI in the equity section. Total assets should be 7,250 and total equity/liab. will equal this if NCI is added.

Lugendran says

Yes its the same with what got.I’m confused. pleplease to clarify this sir. thank you.

lydiaxuxin says

Hi why the full goodwill cannot be calculated as:

1380/75%-(1000+480)=360

as 1380/75%=1840 stands for the total FV of the Erica as of Jan-20X3, and (1000+480) is the total book value of net assets of Erica as of Jan-20X3, so the difference should be the total good will

I guess it is because i did not use the NCI=450 as of Jan-20X3, but I still get confused why there is the difference?

Thank you!

mazai says

Hello,

I am confused why the S’s post-acq. profit is not from W2) Net Assets @post-acq.?

Instead you take S’s RE differences (see below)

w4) NCI = NCI @acq. 450000 + 25%* (660000-480000)= 495000

If you prepare w2) then the S’s post-acq. profit will be : 4040-1480=2560

In the example 7, you use the S’s post-acq. profit from W2) Net Assets @post-acq., but why not to do the same in this example?

mazai says

please ignore this message, i made a mistake in calculating w2)

All is correct 馃檪

sxhawty says

How is it that we used the Fv method when it didnt say it in the question? I thought we were to assume that we are going to use proportional method unless stated otherwise?

P2-D2 says

Hi,

We are given the NCI at fair value in the question, so we should therefore use it to calculate the NCI and goodwill.

If we weren’t given the fair value of the NCI then we would have to use the proportionate share of net assets method.

Thanks

aarina says

sir the total asset and total E&L are not balanced after consol

why is that so?

TA: 6900

TE&L: (2000 + 2175 + 2580) = 6755

tehreemkhan123 says

no your doing the addition wrong. here is the actual adittion in SFP

for ASSETS part we also incorporate Goodwill

hence:

6900+350=7250

for LIABILITIES we have to add NCI in equity hence:

2580+2175+2000+495=7250

HOPE U GET IT 馃檪

nazrin8434 says

Hi sir,

is the total of liability is 1840+740= 2580?

Kindly correct me if aim wrong

thank you

anishgunness says

Thanks

P2-D2 says

Hi,

Good work tehreemkhan123! Yes, the consolidation balances provided that you include the goodwill in the asset total and the NCI in equity.

nazrin8434, yes the liabilities are 2,580.

Thanks

anishgunness says

thanks nazrin

coolgurl210 says

Hi please how did you arrive at the 2,175 figure in the total liabilities computation?

iamdyn says

Hi, 2175 is group RE which was calculated in the lecture.

saabu says

Thank you !

Lugendran says

Yes its the same with what got.I’m confused. pleplease to clarify this sir. thank you.