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Why are the finance costs not included in the net assets of subsidiary working.
Also why the impairment of goodwill not included in the net assets of subsidiary working.Are finance costs deducted from the retained earnings of the seller or parent
Is impairment of goodwill deducted from the retained earnings of the seller or parentFinance costs are an expense through profit or loss and so do not appear in a net assets working. The costs would be deducted from whoever has borrowed the money.
The net assets of the subsidiary does not include the goodwill figure and so there will be no impairment included in the net assets figure either. The goodwill is calculated in a separate working and the impairment deducted from this figure. Impairment is deducted from the retained earnings of the parent but it depends on the valuation method of goodwill. I suggest that you refer to the videos and class notes to further the understanding here.
Why would finance costs related to deferred consideration not appear in a net assets of subsidiary working.
Also if the impairment of goodwill is not included in the net assets of subsidiary working, then why would the non-controlling interest on post acquisition profits be incorrect if impairment is excluded.
If impairment is deducted from the retained earnings of the parent, then why would the non-controlling interest be affected by the impairment of goodwill
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