ACCA December Exams

Post comments & Vote in Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March 2025 exams.
Get your discount code >>

Basics of group accounting- Goodwill calculation using proportionate method

This topic has 1 reply, 2 voices, and was last updated 4 years ago by Stephen Widberg.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
February 10, 2020 at 6:51 am #561229
theordinaryrakshya
Participant
- Topics: 9
- Replies: 4
My question is that while calculating goodwill using the proportionate method, we only get goodwill attributable to the parent company even though we add the nci% of net assets of subsidiary at acquisition. Why do we get only goodwill attributable to the parent even though there is an element of NCI in the calculation?
February 10, 2020 at 7:10 am #561233
Stephen Widberg
Keymaster
- Topics: 15
- Replies: 3355
P pays 100 for 60% of S. S has net assets of 80.
Calculate goodwill using IFRS 3 formula
COST 100
NCI 40% x 80 = 32
NA 80
ANSWER 52
Now, alternative calculation which is a bit more logical:
COST 100
Less 60% of NA = 60% x 80 = 48
ANSWER 52
But use IFRS 3 method in exam
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.