June – 2009 ; BRAVADO

Hi
This is how i understand but not sure it will help.

On the 1 june 2007 Bradova acquired 6% of the share capital of Mixted. the purchase considaration for this is $10m available for sale for the year end 31 of May 2008.

Bravado decide to buy more and bought 64% shares of Mixted on the 1 june 2008 and the considaration $118.
Now Bravado is holding (64%+6%)= 70% of Mixted and Bravado controls Mixted.

To calculated Good will. first we need to know what was the FV and considaration for the 6% of mixted before becoming a subsidiary.

1 june 2007 Holdin 6% considaration $10m
1 june 2008 Holding 64% considaration $118m
1 june 2008 Fair value held by Bravado before business combinatin $15m
1 june 2008 Bravado estimated fair value $12m for june 2008-2009.

2008(Bravado held $15m already before they become one company as bought 6%SC therefore made a gain on this ($15-$10)= $5gain) before subsidiary.

But the FV $12 is estimated after they become one company.

purchase considaration is = ($128-$10)+$12 +$15 = $145

Share capital in SOFP of Mixted is $100
Retain pre earning note( ii) $55
OCE ( ii) 7
FV increase adj 14

Total above = 176 x70% = 123.2
tax ex 166 note ii (176-166×30%) ( 3) x 70% = (2.1)

Good will value is 145 – (123.2 – 2.1) = 23.9GdW

FV idendifyable note (ii):$M
170+6= = 176
(100+55+7)= 162
increase Fv = 176- 162= 14

sorry not sure abt the $4 you are asking as i dont see this figure any where in this Maxet QS.

Hope it make sense