Gd will and NCI — How is this calculated? (48 750) (16 250)

P acquired 75 per cent of the 50 000 shares in S on 1 January 20X7 when S had retained earnings of
$15 000. The market price of S’s shares just before the date of acquisition was $1.60. P values the noncontrolling
interest at fair value. Goodwill is not impaired.
The statements of financial position of P and S at 31 December 20X7 were as follows:
P S
$ $
Property, plant and equipment 60 000 50 000
Shares in S 68 000 –128 000
50 000
Current assets 52 000 35 000
180 000 85 000
Share capital 100 000 50 000
Retained earnings 70 000 25 000
170 000 75 000
Current liabilities 10 000 10 000
180 000 85 000
Prepare the consolidated statement of financial position of the P Group as at 31 December 20X7.
LO
5.4

Workings
1 Goodwill
Group NCI
$ $
Consideration transferred/fair value of NCI (12 500 × $1.60) 68 000 20 000
Net assets of S at acquisition (50 000 + 15 000) Group / NCI share (48 750) (16 250)
Goodwill (parent and non-controlling interest) 19 250 3 750
2 Retained earnings
P S
$ $
Per statement of financial position 70 000 25 000
Less pre-acquisition (15 000)
10 000
Group share of S (10 000 × 75%) 7 500
Group retained earnings 77 500
3 Non-controlling interest at year end
$
Share of net assets of S (75 000 × 25%) 18 750
Goodwill (W1) 3 750
22 500