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Hi sir, hope you doing good
i was asking about how we can workout NCI at disposal when we are asked to calculate gain or loss on disposal of sub. yes there are times they do give the value of NCI at disposal but what will be the way to approach if the exact value was not given assuming that all other relevant info at acquisition and disposal were provided.second, what is negative goodwill?
Third, during working out on gain on disposal of sub, i believe we consider value at acquisition unless there is impairment. but sir, if the goodwill had increased in value at disposal where do we account for this increase?sorry for long questions. as always thanks for your support.
Hi,
I’m very well, thanks. I hope you’re all set for the upcoming exam. It sounds like you will be from the knowledge shown in your posts on the forum the last few months.
The NCI will e calculated in the same was as we’ve done previously. We’d take the fair value at the acquisition date and add on the parent’s share of the post-acquisition profits.
Negative goodwill is where we have paid less than what the asset is worth, and this is recognised immediately on the face of the statement of profit or loss in the year of acquisition.
There will be no increase in the value of goodwill as it cannot be revalued upwards, so you do not need to worry about this.
Sorry I wasn’t able to get back to you earlier in the week, I’m busy marking and got caught up in it all.
Thanks
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