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Hello.
I just had a question about consolidated statements and non controlling interest.
From the lectures, you’ve said the following;
Work out the value of S at acquisition by looking at Investment of P (80%) – eg £8000
Fair value of non controlling interest (20%) – 20/80 x 8000 = £2000.However, in the mock exam it says (when working out non-controlling interest);
Fair value at date of acquisition – 20% of S Capital.
How come the workings to get Fair Value are different?
You do not say which mock exam you are asking about!!
Is it our mock exam, or is it the mock exam in the BPP Revision Kit (I only have the Revision Kit from BPP). If it is the exam in the BPP Kit, then say which of them and which question.
As I say in the lectures, in the exam you will almost certainly be given the fair value of the non-controlling interest. If you are not given it, then what you have written as having been said by me is correct. Maybe in the exam the acquisition took place at the date of incorporation? If so, then the fair value certainly would be 20% of the share capital.
Hello!
So sorry – it was the mock exam on the Open Tuition website – Question 33 (although I think the questions might change every time!).
I’ve checked the question and yes, the acquisition took place at the date of incorporation but that’s the same for Chapter 23 Example 1. In this example, the fair value is worked out using the first method I described in my first post, rather than a % of S Capital.
Will either method work?
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