Consolidation Example 6 - workings chapter 23

SSakina5y ago

Hello sir Hope you are well I had one doubt on the NCI mentioned in this question. They have said Matthews measures NCI using fair value method. So in order to calculate NCI through fair value method isnt the below workings correct? NCI% * Shares of Subs * share price Therefore: 20% * 200 (as 1$ is each share) *1 = 40 So the NCI @ ACQ is 40 Rather than the 200 which is given as the FV of equity shares acquired. Let me know please

PP2-D2Tutor5y ago#1

Hi, When using the fair value method you are correct in stating that we use the share price, but you have used the par value of $1 and not the market value. We are not given the market value per share but we are given the total fair value of the 20% NCI, hence why that has been used in the answer. Thanks