Can you explain to me how to deal with evaluation surplus in consolidated financial statement where should i include it ? should be included in calculation of goodwill ?
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Teo Co acquired 95% of the ordinary share capital of Mat Co 31 December 20X0. The following information relates to Mat Co:
20X0
Retained earnings 700
Revaluation surplus –
20x1
Retained earnings 800
Revaluation surplus 100
The fair value of the non-controlling interest in Mat Co at the date of acquisition was $45,000. What is the amount reported for non-controlling interest in the statement of financial position of the Teo Group as at 31 December 20X1?
the answer was 55
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Group Accounts
5y ago#1The revaluation surplus and the retained earnings are both reserves and are both treated in exactly the same way.
The amount pre-acquisition is included in the calculation of goodwill.
The amount post-acquisition is use in the calculation of the NCI.
For the retained earnings, 100 is post-acquisition and for the revaluation surplus all 100 is post acquisition.
Therefore the NCI in the consolidated SOFP is 45 + 5% x (100 + 100) = 55.
thank you ^^
5y ago#3You are welcome :-)
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