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hello sir
am stuck in working 3: Goodwill on Consolidation on the subsidiarythe note says
On 1 June 2010,premier acquired 80% of the equity share capital of Sanford. The consideration consisted of two elements: a share exchange of three shares in premier for every five acquired shares in Sanford and the issue of a $100 6% loan note for every 500 shares acquired in Sanford. The issue has not yet been recorded by premier, but the issue of the loan notes has been recorded. At the date of acquisition shares in premier had a market value of $5 each and the shares of Sanford had a stock market price of $3.50 each.How is NCI calculated?
in premier investments are $1800How is net identifiable assets at acquisition calculated
“How is NCI calculated?” Did you decide to omit this part of the question?
(v) Premier’s policy is to value the non-controlling interest at fair value at the date of
acquisition. For this purpose Sanford’s share price at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest.“How is net identifiable assets at acquisition calculated” We know the balance of Sandown’s share capital and we can calculate their retained earnings figure as at date of acquisition
The total of those two accounts equates to the carrying value of the net assets as at date of acquisition. But we need to adjust that total figure for the fair value adjustment detailed in note (i) to the question
OK now?
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