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Sir I have doubt on this que… sep 16 gregory co ,I can’t understand why this NCI calculation for fair value is 3600-300?and I don’t understand how to get the $2.4m …
Hi,
The 3,600 is the NCI at the reporting date from the group SFP and the 300 is the profit attributable to the NCI for the year. By deducting the 300 from the 3,600 we are then getting the NCI at acquisition.
The 2,400 comes from the 300 figure representing 25%, so the full amount would be 1,200 (300/0.25) but this is only for 6 months. We then need to double it to get the figure for the full twelve months.
I think calculating these figures would not be necessary in the real exam and have only been shown for demonstration purposes, so don’t worry too much about it.
Thanks
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