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Consolidation question 1 of June 2014 Exam , i have a doubt on increase in NCI figure of Nathan as in the answer they have taken the % decrease x carrying value of the investment .
But in Kaplan text its given that in case of increase in NCI , u take % increase x (Fair value of net assets + goodwill (ALWAYS)), when i am doing it according to this method i am getting increase in Equity of 6.3m whereas answer as per the other method is 5.3m
So can you please help me to understand this issue?????
sorry in examiner answer its Carrying value of investment x (% increase/total interest), i get this point but in kaplan text this method is given for decrease in NCi and for increase in NCI ,i have already written above.
Hi – you have me at a disadvantage in that I don’t have any Kaplan material to hand!
The value of the nci, no matter at what date you are considering the issue is always going to be:
Value as at date of acquisition +
Share of post-acquisition retained earnings (and any other reserves increased since acquisition) –
Their share of any goodwill impairmentDoes that formula not work in the question to which you refer?
Actually the requirment (i) of the question was to make a consolidated statement of profit and loss , and when i calculated the gain on disposal(increase in equity) i got 6.3m(using formula : % increase x fair value of net assets + total goodwill) , whereas in answer it was 5.3m(using formula : % increase x carrying value of invesment )
Requirement (ii) of the question was to explain how this increase in NCI is going to effect consolidated statement of financial position , as per examiner answer its effect in C.S.F.P will be 6.3 million , calculated exactly using same formula which i used for C.S.P.L
so i am confused is it like , for C.S.P.L , we have to take carrying value of investment and for C.S.F.P , we have to take fair value of net assets plus goodwill ??????????
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