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Hi, write me to this address: skg0ovvl1@relay.firefox.com
(it’s an alias to avoid spam)P2-D2 wrote:I don’t quite follow the NCI calculation as it should be the NCI at acquisition of $150,000 plus the 20% of the post aquisition movement in reserves. I make the movement to be $300,000 ($710,000 – $410,000) but then this doesn’t then give the correct answer, and gives $210,000. It could be there is a mistake in the solution or that I’m missing something.
The correct figures to calculate NCI would’ve been:
710-460=250It was definitely a confusing question.
Well I finally understood this problem. The $710 figure includes the brand name fair value of $50 (710-50=660)
S’s NA:
at date of disposal = s/cap + reserves + brand = 100+660+50 = 810
at acq date = s/cap + reserves + brand = 100+410+50 = 560
post acquisition profits = 810-560 = 250NCI% of post acquisition profits = 250*20% = 50
NCI figure = NCI @ acq (FV) + NCI% post acq profits = 150+50 = 200
Goodwill = 600+150-100-410-50 = 190
Gain on disposal (group accounts) = 1500-810-190+200 = 700
I just spotted an error in their Goodwill calculation, it says:
600+150-410-50=190
but if you do the sum, the result is 290. They forgot to add 100 corresponding to the subsidiary’s share capital. The correct answer IS 190 though.
Hi, thank you for making this question. I’m trying to solve it right now, but their NCI calculation is confusing. I will assume that it is a mistake. I arrived to the same answer that the tutor gave you.
