Question
Below are the statements of financial position of three companies as at 31 December 20X9.
_________________________Bauble _____Jewel ______Gem
Non-current assets
Property, plant and equipment ___720 _______60 __________70
Investments in group companies __185 _______100 _________ 0
__________________________ _905 ________60 __________ 70
Current assets________________ 175__________95___________90
_________________________ 1,080_________255 __________160
Equity
Share capital – $1 ordinary shares 400 100 50
Retained earnings 560 90 65
960 190 115
Current liabilities 120 65 45
1,080 255 160
You are also given the following information:
(a) Bauble Co acquired 60% of the share capital of Jewel Co on 1 January 20X2 and 10% of Gem on 1 January
20X3. The cost of the combinations were $142,000 and $43,000 respectively. Jewel Co acquired 70% of the
share capital of Gem Co on 1 January 20X3.
Answer
Goodwill
___________________________Jewel _____________Gem
$'000 $'000 $'000 $'000
Consideration transferred: Bauble 142 _____________43.0
Consideration transferred: Jewel _______(100 × 60%) 60.0
NCI _______________(145 × 40%) 58 ____ (90 × 48%) 43.2
Net assets at acq'n as
represented by:
Share capital ________________100 _____________50
Ret'd earnings _______________45 _____________ 40
_________________________ (145) ___________ (90.0)
Goodwill 55 56.2
Total goodwill = $111,200
Where do we get the 100 in purchase consideration transferred from for Gem?
Ask the Tutor ACCA SBR
Calculation of Goodwill in Complex groups
It's our share of what Jewel has paid for Gem.
Look at the SofFPs and you'll see in the Jewel column the figure of $100 listed at "investment in group companies"
Ok?
Thank You Mike!!
You're welcome
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