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MikeLittle.
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- December 6, 2017 at 3:32 pm #421073
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. 1200Issued 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. 1096December 6, 2017 at 10:59 pm #421339The 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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