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Consolidated statement related sum

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Consolidated statement related sum

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by MikeLittle.
Viewing 2 posts - 1 through 2 (of 2 total)
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    Posts
  • December 6, 2017 at 3:32 pm #421073
    luncia1
    Member
    • Topics: 13
    • Replies: 5
    • ☆

    I have a doubt relating to the working note of goodwill of the following question.
    Parent. Subsidiary
    Non-current assets.
    Tangible assets. 1000. 600
    Investment in Subsidiary. 1,200. –
    Net current assets. 500. 600
    TOTAL. 2,700. 1200

    Issued capital (NV $1). 100. 50
    Retained earnings. 2600. 1,150
    Further information:
    1. Parent bought 80% of Subsidiary two years ago.
    2. Subsidiary’s reserves are $150 at the date of acquisition.
    3. Goodwill has been impaired by $200 since the date of acquisition.
    4. Non-controlling interest is valued at fair value on acquisition; it is credited with its share of goodwill. The market price of a share in the subsidiary at the date of acquisition was $29.60.

    As the solution given does not explain why FV OF NCI is calculated as 10*29.6 & I want to know what does 10 indicate?->>>
    Goodwill: $
    Cost. 1,200
    Fair value of non-controlling interest (10 × $29.60) 296??
    Less: Net assets on acquisition (100%). (200)
    Less: Goodwill Impaired (200)
    Total. 1096

    December 6, 2017 at 10:59 pm #421339
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23309
    • ☆☆☆☆☆

    The subsidiary share capital is 50 and the parent bought 80% of 50

    That means that the nci holds 20% of the 50

    What’s 20% of 50?

    OK?

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    Posts
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