Lecture Notes Chapter 3 Example 4

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May 11, 2015 at 1:00 pm #245256
zhaoyunyi
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Dear Lecturer,
I have 2 questions regarding to this question.
1. In W3 retained earning calculation, the goodwill impaired is (11900+400+1400), but I think the 400 & 1400 are total goodwill impaired, so should be split between A and NCI, why not?
2. In W4A, why the share of investment in Liene is deducted from K not L? In Example 3, this amount is deducted from the sub-subsidiary, so I am confused. How do we decide which company should this element be deducted from?
Thank you
May 11, 2015 at 9:19 pm #245338
MikeLittle
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Because that subsidiary’s nci is valued on a proportional basis
Work it out both ways – I think that you’ll find that it comes to the same answer
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