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Hello
I am looking at an example but i am confused by the line which involves the shares. Can you please tell me how to calculate the goodwill in such a situation? the answer provided is 130 but as you can see below i am not getting that.The example was:
P buys 70% S for 800. The FV of S’s Net assets were 1,000. The FV method of calculating NCI at acquisition is used. At acquisition date S had 100 shares in issue and they had a MV of £11.what i did in my answer was:
800 consideration
300 + nci
1,000 – fv of net assets acquired
100 = goodwillthanks
Hi,
You’re correct with it all except that your NCI is wrong. It should be 330 (30% x 100 shares x £11).
Thanks
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Could you please clarify my confusion
When NCI is measured at Fair Vallue, calculated goodwill for example 130.000 is full goodwill. (Both parent part and NCI`s part. ) So why in Balance sheet when we consolidate we post full 130 000 there , not just parent part?
Hi,
Because the parent controls the goodwill and all assets/liabilities that it controls are shown on the group SFP.
Thanks
Hello,
On Jan’18 P acquires 80% of S. And at the date of the acquisition, goodwill was measured at $20,000. On Dec’18, the goodwill is fully impaired. What is the amount charged to group retained earnings? Ans: $16,000
I would just like to confirm, what would be the journal entry of the goodwill impairment on P’s accounts? Since P recognizes $20,000 initially on their GW account, if it’s fully impaired, 16,000 is charged to SOPL, then where is the rest of the 4,000 charged to? NCI?
Alternatively, if it uses the proportionate goodwill method, the full 20,000 will be charged to SOPL. Correct?
Thanks.
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