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Hello
A company acquired 80% S when the FV of S’s Net Assets were 1,000. The company uses the FV method to value NCI at acquisition. FV of NCI at acquisition was 240
S has since made 800 profits.Goodwill has been impaired though by 100. How much is NCI on the SFP ?
the correct answer is 380 but i did not get that. Could you explain please?Thanks
NCI calculation for SFP:
Fair value of NCI 240
Add:NCI % × post profit 160
(20% ×800)
Less: NCI % ×imp (20)
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380
Proportioning using Nci % for both. Its simple.Hi,
The key is to remember that if the goodwill is measured using the fair value or full goodwill method then any impairment is split between the parent and the NCI because the goodwill figure calculated consists of the parent’s and NCI’s goodwill.
Thanks
P.S. Riya, you may find it simple but other do not so please bear that in mind when making your comments. Thanks
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