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FV vs proportionate method lf measuring NCI

Forums › ACCA Forums › ACCA SBR Strategic Business Reporting Forums › FV vs proportionate method lf measuring NCI

  • This topic has 2 replies, 1 voice, and was last updated 3 months ago by faizhanan.
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  • November 20, 2019 at 4:40 pm #553213
    amiirs
    • Topics: 22
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    Hi
    What’s the logic behind charging impairment on goodwill to both NCI and R.Earnings when NCI is measured using the Fair value method but impairment on goodwill is only charged to retained earnings when using the proportion of net asset method to measure NCI. Grateful if you could explain why this is the case?
    Thanking you in advance

    November 21, 2019 at 10:45 am #553270
    f6ali
    Moderator
    • Topics: 10
    • Replies: 284
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    Thats because when using fair values, a share of goodwill is also attributed to the NCI. So if NCI have a share in goodwill calculated on acquisition, they should also bear any impairment equal to their share in net assets.

    On the other hand, when NCI is calculated using proportionate method, no goodwill is attributed to NCI and hence no impairment is charged.

    October 16, 2020 at 3:25 am #589050
    faizhanan
    • Topics: 0
    • Replies: 1
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    Hi,
    Does the Consolidated Financial Statement is different between the fair value method of calculating the NCI and the proportionate method?

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