Group SFP – Goodwill – ACCA Financial Reporting (FR)
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Why the goodwill amount is different between the 2 method?
It is different due to the way they are calculated. There are two methods for the calculation. The method of fair value favors market data whereas the second method uses a percentage of the net assets to calculate the NCI of the entity. Both methods are equally acceptable when calculating the amounts.
However the method used would be probably disclosed in the financial statements as to inform the users to the way that the goodwill was calculated.
Because, Proportionate share method we got Partial Goodwill [only P Co.] but in Fair value Method we got Full goodwill [P co. + NCI].
Isn’t the partial goodwill method calculated as the difference between the purchase consideration paid by the parent and the parent’s share of the fair value of the net identifiable assets?
P’s goodwill = 28,500 (38,000 x 75%)
NCI’s goodwill = 9,500 (38,000 x 25%)
Why not just do this?
same doubt
15 minutes into the lecture, why don’t you just do:
P’s goodwill = 28,500 (38,000 x 75%)
NCI’s goodwill = 9,500 (38,000 x 25%)