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goodwill impairment – Group reporting

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  • This topic has 1 reply, 2 voices, and was last updated 4 months ago by lfede09.
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  • February 24, 2022 at 2:12 pm #649281
    ks13
    • Topics: 12
    • Replies: 11
    • ☆

    Watts Co acquired 70% of the share capital of Pilkington Co on 1 January 20X2 for
    $300,000.
    The goodwill arising on consolidation has been impaired by $50,000 as at 31 December
    20X5.
    The share capital and reserves of the two companies as at 31 December 20X5 were as
    follows:
    Watts Co Pilkington Co
    Share Capital $400,000 $150,000
    Retained earnings $300,000 $200,000
    At the date of acquisition Pilkington Co had retained earnings of $125,000. Watts Co
    measures the non-controlling interest as the proportion of net assets of the subsidiary.
    In the consolidated statement of financial position of at 31 December 20X5 what amount
    should appear for the non-controlling interest?
    My answer is coming $90000. Is it right?
    Please help in this one

    February 24, 2022 at 5:31 pm #649287
    lfede09
    • Topics: 4
    • Replies: 4
    • ☆

    Consideration 300,000
    NCI ( 30%* 275,000) 82,500

    Less sub’s NET ASSET at acq. date (275,000)

    107,500
    Less Impairment (50,000)

    GOODWILL 57,500

    NCI:
    82,500
    22,500(30%*75,000)

    (15000) (30%*50,000) Impairment

    90,000 Total

    You’r right!
    Bye

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