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How do i start the following question below without even knowing the value of NCI at acquisition date?
Qn. The elite company acquired a 60% interest in the Piyot company when piyot’s equity comprised share capital of $100 000 and Retained earnings of $150 000.
Piyot’s current statement of financial position shows share capital of $100 000, a revaluation reserve of $75000 and retained earnings of 300 000.
Under IFRS 10 consolidated financial statements, what figure in respect of the Non-controlling interest should be included in Elite’s consolidated statement of financial position ?
Yes. Correct! The answer is 190 000. This question is from my lecture notes.
How did you work the question out ?
I added the reserves at the year end and took the nci’s share of it.
100 + 75 + 300 = 475
40% x 475 = 190Are my workings correct ?
No
the nci value is calculated as …
nci value at date of acquisition
+
their share of S post acquisition retained
–
their share of goodwill
Value at date of acquisition is 40% x (100,000 + 150,000) = 100,000
Share of post acq retained is 40% x (75,000 + (300,000 – 150,000)) = 90
Total nci at the year end is 100,000 + 90,000 = 190,000
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