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P2-D2.
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Sakina
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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
P2-D2
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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
Sakina
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