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Dear sir, please help me to explain about the answer for question on Conslidation of PL of Prodigal Co in Jun 2011: why in the calculation of NCI, non current asset PURP exess depreciation is +200.I think this is extra depreciation of increase fair value of plant and it reduce NCI , so the adjustment of NCI should be -200?And why in the calculation of goodwill, retain earning of subsidiary = 125000+66600*6/12, not 125000+66000*6/12? 66000 is profit for the year, 66600 is TCI for the year.Thank you
Hi,
I’ve not got the question to hand but I recall that this was a reduction in the depreciation of the asses and so a saving.
When calculating the goodwill the net assets figure is equal to the share capital plus reserves. Reserves consist of both profit and other comprehensive income, therefore we have to use the TCI figure as this will include the profit and other comprehensive income.
Thanks
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