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Hello sir,
I would like to ask about the way how we calculate the goodwill,
when we have a total value of company 90 000, we have to deduct from it amount of share capital of subsidiary company and pre-acquisition earnings, but why we take the whole 100 % of share capital instead of 30% (70% belong to us)Regards,
In the consolidated statements we show the total value of the assets (and liabilities) in the ‘combined company’ – not just the parent companies shares. (So we show the total non-current assets, the total current assets etc..). In the same way we show the total goodwill – not simply the parent company’s share.
Separately on the statement we show how much of the total net assets belongs to the shareholders of the parent company and how much belongs to the non-controlling interest.
(Have you watched the lectures that go with the notes? The lectures work through the examples, and explain and expand on the notes – you should not use the notes on their own. If you are not watching the lectures for any reason then you must study using a Study Text from one of the ACCA approved publishers – not from the lecture notes.)
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