June 2010 Ashanti

Hi, Sorry, but I'm not too sure I follow what you're saying above. When you say use NCI of Ceram, what are we using it for? Likewise in your second point what are you trying to calculate? If you elaborate a bit more then I'll be abel to help. Thanks

OK when bochem (subsidiary) acquired ceram (sub- subsidiary) we use fv of NCI of ceram ATTRIBUTABLE to ASHANTI ( parent). But when we dispose Ceram ,to calculate gain/loss we are given in question fair value NCI of ceram ATTRIBUTABLE to BOCHEM. So why not use use the same NCI of ceram attributable to Ashanti while disposing. Hope I am better at clarifying query.

Hi, I see where the confusion is now, thanks. Personally I wouldn't pay any interest to who the NCI belongs to as this leads to the confusion. When Bochem acquires Ceram, Ceram becomes a sub-subsidiary of the group so we need to calculate the goodwill. In calculating this we need the NCI, which is that attributable to Ashanti as it is the parent who has ultimate control, and is valuing the 44% NCI. The question would be easier if it said the 44% NCI is valued at $26 million but then that would give away the effective holdings that you're expected to calculate. On disposal of the holding in Ceram, where it then becomes an associate we need to calculate the group profit or loss which requires the use of the NCI in the calculation. As we're not disposing of the entire sub-subsidiary then we can't use the entire NCI attributable to Astranti but that which is attributable to the subsidiary. As I said at the start don't get bogged down in the detail, just use the information that is given and you won't got too far wrong. Thanks