Calculation of Goodwill and NCI (Example 1 – Vertical group structure)

Please, examine the following alternative solution. There's a little confusion in regard to calculation of Goodwill and NCI. (If needed, I can mail excel file of this solution via [email protected]) Solution: a. Analysis of Net Assets of Russell Particulars At acquision date Post Acquisition Total Share Capital 40,000.00 - 40,000.00 Retained Earnings 20,000.00 25,000.00 45,000.00 Total 60,000.00 25,000.00 85,000.00 NCI @30% (or Given) 20,000.00 7,500.00 Gayle (BF) 40,000.00 17,500.00 b. Analysis of Net Assets of Gayle Particulars At acquision date Post Acquisition Total Share Capital 50,000.00 - 50,000.00 Retained Earnings 40,000.00 35,000.00 75,000.00 Total 90,000.00 35,000.00 125,000.00 Add: Transfer from Russell - 17,500.00 Total 90,000.00 52,500.00 NCI @20% (or Given) 25,000.00 10,500.00 Bravo (BF) 65,000.00 42,000.00 c. Calculation of Goodwill Fair value of consideration (74,000+55,000) 129,000.00 Less: Fair value of net assets @ acq. Attributable of parents (40,000 + 65,000 from W a & W b) 105,000.00 Goodwill 24,000.00 OR Fair value of consideration (74,000+55,000) 129,000.00 Add: Fair value of NCI @acq date 45,000.00 Less: Fair value of net assets @ acq. 150,000.00 Goodwill 24,000.00 d. Calculation of NCI @ year end NCI @ acquisition date (W a + W b) 45,000.00 Add: Post acquisition profit (7,500+10,500) 18,000.00 NCI @ year end 63,000.00 e. Calculation of group retained earning Bravo 65,000.00 Add: PAP (W b) 42,000.00 Total 107,000.00 Statement of Financial Position Particulars Amount Non-current Assets 213,000.00 Goodwill (W c) 24,000.00 Current Assets 121,000.00 Total 358,000.00 Share Capital 100,000.00 Retained Earning (W e) 107,000.00 NCI (W d) 63,000.00 Non-current liabilities 39,000.00 Current liabilities 49,000.00 Total 358,000.00