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When my questions states that shares are issued for example 1 for 2 but there is no number to generate the parent’s share capital, should we assume the cost for consideration is number of shares multiplied by current share price?
If the question doesn’t give us a value for net assets of subsidiary, should we reverse engineer the value of nci to help in the calculation of goodwill?
For your first question, it is the number of the subsidiaries shares that is relevant. You would be given that value of the parent companies shares that are being issued.
For your second question, you do not need to be given the value of the net assets of the subsidiary!! It is the net assets at the date of acquisition that are relevant and they are equal to the share capital plus the pre-acquisition retained earnings. If the is a fair value adjustment that you would be told in the question.
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