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hi there
I am bit confused with goodwill. I know how to calculate when to calculate. The only thing i am struggling with is, sometimes when there are full SOFP questions I understand they calculate CI goodwill and NCI goodwill and then add them together for total goodwill.
I was doing one question from June 2008 called sardonic, we are asked to calculate goodwill. I checked the solution they have only calculated CI gw.
How do I know when to or when not to include nci, help please
Thanks
gutsychykI don’t remember the question Sardonic’s details but may I suggest that you check to see whether the question says, either in the introductory paragraph or in the detailed notes, that the “Directors have valued the nci investment as the same as their share of the fair valued net assets as at date of acquisition.
If that’s the case, then the nci share of goodwill is zero.
The alternative possibility is that the question specifically asks for the “goodwill attributable to the parent company”
If neither of those applies, then post again and I’ll look at Sardonic and get back to you
@gutsychyk said:
hi there
I am bit confused with goodwill. I know how to calculate when to calculate. The only thing i am struggling with is, sometimes when there are full SOFP questions I understand they calculate CI goodwill and NCI goodwill and then add them together for total goodwill.
I was doing one question from June 2008 called sardonic, we are asked to calculate goodwill. I checked the solution they have only calculated CI gw.
How do I know when to or when not to include nci, help please
Thanks
gutsychykI’m assuming that you studied from BPP text and solving a question from Kaplan kit. If this is the case, then I would like to tell you that the two texts have different methods of calculating the goodwill. In BPP, they find the g/w for Parent and NCI and add them together in CSOFP. In FTC, they find directly the total g/w. So the g/w value of 23 in the answer is actually the total g/w. If you want to calculate it separately for P and NCI and then add the two, here’s how you do it.
Parent NCI
Consideration tranferrred (Investment) 210 65
Loan note (116/200 * 100) 58 –
Less: Net assets of S at acq’n (248) (62)
(310*80% for P, 310*20% for NCI)
Goodwill 20 3Note that 20+3=23 (the answer in your kit). Hope this helps.
Whoops! I wrote it quite clearly but all the spaces got removed once it got posted. Hope its clear to you. Read it this way: Parent: 210+58-248=20. NCI: 65+0-62=3.
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