FV vs proportionate method lf measuring NCI

This topic has 2 replies, 3 voices, and was last updated 5 years ago by faizhanan.

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November 20, 2019 at 4:40 pm #553213

amiirs
Participant

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
Member

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
Member

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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