Marchant 06/2014 Q1

The cash flow hedge HAS been included within the workings in the Nathan column and the resultant bottom line has then been used for the calculation of the nci As for the 2 reversed goodwill, the question tells us that the 2 unimpairment of goodwill has already been accounted for in arriving at the figures in the draft statements. But, crucially, the unimpairment of 2 has been adjusted for in Marchant's own PorL so the reversal has an affect just on Marchant Ok?

Hi when Marchant disposed of the 8% I added the Net Assets and the Goodwill at that date and took 8% of it to give me the amount disposed of, however that is not how it was done in the answer. I am puzzled at this eleventh hour as that is how I have been doing them all along and taught to do them too. Why did they use the carrying value of the investment?

Without looking at the question, the carrying value is used because that's the value that is included as part of the net assets at date of disposal. The fair value hasn't been reflected within the records. If it had been included the retained earnings would have correspondingly increased, but that's not the case here. Ok?

Sorry, I'm still lost

When 8% of an asset is disposed of, we're disposing of 8% of the carrying value of the asset in the records of the parent company When we're looking at gain / loss in the group, we're disposing of 8% of the subsidiary's assets NOT including goodwill. The goodwill that we are disposing of (say we held 80% of the subsidiary and were disposing of 8%) is 10% of the value of our share of the goodwill that we calculated in working W2 The assets disposed of will be 8% of the fair valued net assets PLUS 8/80 of our share of the goodwill There is an example of this in the course notes

Sorry Mike I still not understand why not incl % profit attribute to NCI of Nathan? The figure 11.8 profit belonged to NCI is wholly calculated on Option's nci. Where Nathan's nci here?

Ah. My mistake! I have confused 2 figure $22m - profit of Nathan for period and 22 of gain fr disposal Option. That's ok. None of Option's nci @ reporting date. It's all from Nathan in the lines "attribute to NCI". ????

You're misinterpreting the answer! The line says: 40% of $22m + 40% of $15m/2 = $11.8 m The first part of that line (40% of $22m) relates to Nathan Only the second part (40% of $15m/2) relates to Option Is that better?

sorry for not giving my thanks soon i clearly understand,tutor :-)

That's ok and you're welcome