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FR, Group SFP example 6 – workings

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › FR, Group SFP example 6 – workings

  • This topic has 1 reply, 2 voices, and was last updated 1 month ago by P2-D2.
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  • Author
    Posts
  • July 30, 2023 at 11:06 am #689136
    Meloman
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    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 advance

    August 6, 2023 at 8:35 am #689443
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6699
    • ☆☆☆☆☆

    Hi,

    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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    Posts
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