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A question to Chris, hi!
Can u pls explain why in calculating Goodwill (W3) u used FV of equity shares at acq’n (200 000) as NCI, not just the NCI share (200 000 * 20% = 40 000)? So in the end ur Group SFP balanced (because u also used 200 000 insted of 40 000 in NCI (W4) calculation) but I think there is an overstated balance.
Thanks in advanceHi,
In this question we are given the value of the NCI at acquisition, so we do not need to use the number of NCI shares and the fair value of each share.
If you wanted, although it is not necessary, you could work backwards from this $200,000 figure and the fact that we could work out the NCI shares as 20% of the 200,000 shares in the subsidiary, being 40,000 shares. I think this would give a share price of $5 ($200,000/40,000).
Thanks
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