good will

I don't have the BPP revision kit :-( Can you give me ALL the relevant information - then I can give you an explanation Thanks

thanks a lot for your response, this question is past paper June 2011. many thanks

that past paper didn't require calculate good will, the practice kit required and information which was past paper is the same as practice kit, help me please! thanks a lot

What does BPP say for goodwill? Is it 100,000?

thank you for your asking, that question is ACCA f7 past paper June 2011, namely Prodigal. On 1 October 2000 Prodigal purchased 75% of the equity shares in Sentinel. the acquisition was through a share exchange of two shares in Prodigal for every three shares in Sentinel. the stock market price of Prodigal's shares at 1 October 2000 was 4 per share. the following information for the equity of the companies at 1 April 2000(ie before the share exchange took place) is available: Prodigal Sentinel ($000) equity share of $1 each 250,000 160,000 share premium 100,000 nil revaluation reserve(land) 8,400 nil other equity reserve 3,200 2,200 retained earnings 90,000 125,000 the answer shown that when calculating the good will , the net assets on DOA : sentinel’s share 160,000 +equity reserve 2200 +retained earnings 125,000 which are shown on 1 April 2000's statement, my question is that why it didn’t add 66600×6/12? because the acquisition day is 1October 2000. hopefully I described clearly. many thanks

I think that it should be 66,000 x 6/12 because the OCI adjustments were post-acquisition I asked you what does BPP say for goodwill but you didn't answer me :-(

Sorry for response too late, the BPP answer is that: consideration(((160,000x75%)x2/3)x$4) 320,000 Fair value of non-controlling interest 100,000 fair value of net asset: shares 160,000 other equity reserve 2,200 retained earnings 125,000 good will 132,800 I am very confused many thanks

I'm still getting goodwill to be 99,500 (not 100,000 as per my earlier post) Pity that the ACCA didn't include the working even though it wasn't asked for :-(

thank you Sir

You're welcome