Explain the formular of calculating Goodwill

TTuan10y ago

Hi everyone, I'm new to ACCA and studying F3. For calculating Goodwill, we have this formula : Good will = Consideration transfered + NCI fair value - Net assets recognized I don't understand why we plus with NCI. Thank for your help!

John MoffatTutor10y ago#1

Consideration is what the parent company paid for their share of the subsidiary. Fair value of the NCI at the date of acquisition is the value of the remaining share. Add the two together and you have the total value of the subsidiary at the date of acquisition. I do suggest that you watch our free lectures - they are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.

TTuan10y ago#2

Thanks alot for your advice!

John MoffatTutor10y ago#3

You are welcome :-)

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