[aqua2581]

Ok this is the question:-

Baggs was aquired last yr 80% sub.

Cost of invest – $100m being the amt of cash that will be paid 2yrs after the date of acq.
Share cap & reserves $30m each at acq. date.
Baggs reported income of $20m.
No account was taken of fair valu adj. The following info is relevant at date of acq.

1) Interest Rates were 5%
2) Non current assets book value of $15m at acq. and remaining life of 10yrs had a market value of $20m.
3) Baggs had a 2 yr 6% fixed rate loan of $20m
4) Inventory had a fair value of $5m more than carrying value.

The parent has group reserves at year end of $400m. Recoverable amt of Baggs is $120m at year end.

Required
Calculate Goodwill,Non Controlling Interest in net assets & Group Reseves.

I dont understand the treatment of the Loan

I hope you can help.

Thanks in advance

[aqua2581]

I can send you a copy of the question. How do I upload it here or can you provide an email for me to send it too?

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