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NCI Impairment Goodwill Proportionate method

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › NCI Impairment Goodwill Proportionate method

  • This topic has 6 replies, 2 voices, and was last updated 4 years ago by Stephen Widberg.
Viewing 7 posts - 1 through 7 (of 7 total)
  • Author
    Posts
  • January 29, 2021 at 2:03 pm #608447
    soo
    Member
    • Topics: 4
    • Replies: 10
    • ☆

    Hi, Would like to ask why NCI is not allocate any goodwill under proportionate method? Understand that NCI is entitled only to their share of the subsidiary’s fair valued net assets, but why no goodwill for NCI?
    Thanks.

    January 29, 2021 at 3:07 pm #608456
    soo
    Member
    • Topics: 4
    • Replies: 10
    • ☆

    Hi, also would like to know the double entry of the impairment loss for proportionate method and full fair value method. Thanks.

    January 29, 2021 at 5:24 pm #608493
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3404
    • ☆☆☆☆☆

    Proportionate goodwill means that goodwill is only calculated on the parent’s share of the subsidiary – what the parent paid compared to what the parent got.

    So, the full amount of the impairment is charged to the parent.

    DR RE CR GW

    Full goodwill is calculated on the whole subsidiary – what the parent paid PLUS what the NCI would have paid if they had been buying the subsidiary compared to what EVERYONE got.

    So, the impairment is SHARED between the parent and the NCI.

    DR RE DR NCI CR GW

    February 1, 2021 at 3:45 pm #608768
    soo
    Member
    • Topics: 4
    • Replies: 10
    • ☆

    Hi, Just to clarify the full goodwill that double entry. By Dr. RE (Deduct parent portion RE) and Dr. NCI (Deduct NCI portion RE) right?

    February 2, 2021 at 9:45 am #608833
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3404
    • ☆☆☆☆☆

    Perfect

    February 2, 2021 at 1:00 pm #608842
    soo
    Member
    • Topics: 4
    • Replies: 10
    • ☆

    Well noted. Thanks Stephen 🙂

    February 3, 2021 at 12:03 pm #608954
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3404
    • ☆☆☆☆☆

    My pleasure.

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