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hi im a new student to P2 and i noticed in the video lectures that the “old” method that was used for the calculation of goodwill is not used as mike said that he’s not allowed to teach that anymore. i was wondering is it that that method is just not taught or would one be penalised for using it in an exam. i would really like to know as i am comfortable with that method and i would like to know if i would have to learn a new one or not.
Thanks
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I hope you are talking about Full Goodwill method (New method) and Partial Goodwill method (Old method). Both are examinable. It will be mentioned in the question or with the available information we need to find which method to use. So try to learn both. Even My lecturer taught only full goodwill method. but why to take risk
thanks
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In most cases full goodwill method should be used. Watch out for whether the NCI is measured at fair value or proportionate to the identifiable net asset.
It is only if indicated or when no choice of accounting method for NCI is available the partial goodwill method would be used.
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