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How do they come up with the figure for additional 10% under nci of $16.03.
Thanks a mill
This is derived from calculating the value of the NCI of Petal @ the date of the additional 10% purchase. The NCI own 30% of Petal and Rose are acquiring 1/3 of that. Firstly you get your NCI @ Acq date, 46.00. Now work out if they’ve made any profits to increase their value from 46. (or the opposite) So the post Acq profits were 4.00 other & 56.00 p&l as per the SOFP, minus the amortisation of the patent which was not included in the SOFP giving you 59. So @ Acq date other was 3 & p&l was 49 = 52. There’s a 7m gain in the year. NCI’s share = 30%, so 2.1. Add the NCI @ Acq date to post Acq profits. 46.00 + 2.10 = 48.10 / 3 as we want 10% = 16.03.
Hope this helps & good luck!!!
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