NCI on proportionate on net assets

Hello Mr Chris ,

How are you,

In the following example there is an impairment of goodwill
But the issue is the calculation of NCI ,
I found in the answer that they calculated the the NCI by taken orginal subsidiary Capital + retained earnings at ACQ x 30% and thats really correct
,which gives 82500

But in the year end NCI now here we have to take the original capital of subsidiary +post acq profit x 30%

or we have to build up on the total of the NCI at acquisition which was 82500
+200000-125000=75000*30% =22500 less imp of goodwill (50000 x 30%)15000=7500
then the toal =90000

please help in this as it is comfusing,

Thanks,
———————————–
Q

Watts Co acquired 70% of the sh are capital of Pilkington Co on 1 January 20X2 for
$300,000.
The goodwill arising on consolidation has been impaired by $50,000 as at 31 December
20X5.
The share capital and reserves of the two companies as at 31 December 20X5 were as
follows:
Watts Co Pilkington Co
Share Capital $400,000 $150,000
Retained earnings $300,000 $200,000
At the date of acquisition Pilkington Co had retained earnings of $125,000. Watts Co
measures the non-controlling interest as the proportion of net assets of the subsidiary.
In the consolidated statement of financial position of at 31 December 20X5 what amount
should appear for the non-controlling interest?
A $105,000
B $90,000
C $82,500
D $60,000

Answer

NCI at acq= 30% * 275,000 = 82,500

NCI=
82,500
Retained earnings= 200,000-125,000= 75,000*30%= 22,500

Less Impairment= 50,000*30%= (15,000)

TOTAL= 82,500+ 22,500 – (15,000) = 90,000.