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goodwill impairment – Group reporting

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › goodwill impairment – Group reporting

  • This topic has 1 reply, 2 voices, and was last updated 4 months ago by lfede09.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • February 24, 2022 at 2:11 pm #649280
    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?
    A $105,000
    B $90,000
    C $82,500
    D $60,000
    My answer is coming $90000. Is it right?
    Please help in this one

    February 24, 2022 at 7:51 pm #649297
    lfede09
    • Topics: 4
    • Replies: 4
    • ☆

    NCI at acq= 30% * 275,000 = 82,500

    NCI=
    82,500
    Retained earnings= 200,000-125,000= 75,000*30%= 22,500

    Less Impairment= 50,000*30%= (15,000)

    TOTAL= 82,500+ 22,500 – (15,000) = 90,000.

    You’r right!
    Good Luck!

  • Author
    Posts
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