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Dear John,
Below is a question from BPP;S has 10million $1 issued ordinary shares. At 1 May 20X9 P purchased 70% of S’s $1 ordinary Shares for $8,000,000. At that date S had net assets with a fair value of $8,750,000 and it’s share price was $1.20. The Non-Controlling interest is valued using the share price at the date of aquisition.
Please be kind enough to elaborate on How to calculate the “Fair-Value of the NCI”.
Thank You!
The NCO own 30% of the shares which is 3,000,000 shares.
The question says that they are to be valued using the share price as the date of acquisition which is given at $1.20, and therefore the fair value is 3M x $1.20.
Understood!
Thank You very much for the quick response.
I will be taking the FA exam this week 🙂
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