- This topic has 3 replies, 2 voices, and was last updated 8 years ago by
.
- Posts
Sir, with regards to example 2 the dividends were onlydeclared. As far as I know declared dividends do not affect the accounts but only the paid dividends do
Secondly, I am confused with GW calculation in example 3. The normal procedure for NCI at acquisition just like in example 2 will give 30% of $3400, GW for NCI as $680, whereas it is given as $700. Shouldn’t the difference $20m be accounted for differently?
Kindly explain.
Hi,
We account for dividends when they are declared as that is when there is the obligation to pay then and therefore they meet the definition of a liability.
The goodwill is accounted for using the fair value method and so we use the fair value of the NCI at acquisition, which in the question is given as $700 million.
Thanks
- You must be logged in to reply to this topic.