Open Tuition notes Chap 4 -Example 1

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March 19, 2013 at 2:51 am #120053
christine71
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How to derive the Fair Value of existing holding at date of obtaining cotrol ? Can someone help ?
” When Aisvydas acquired 15% of Roberta’s $400k sh.cap in 2007 for $100k, Roberta’s retained earnings were $ 200k.
2 years later Aisvydas acquired a further 60% of Roberta’s shares for $520k when the retained earnings had risen to $360k (sh.cap unchanged). The FV of the NCI – $ 200k. Calculate Goodwill and profit on deemped disposal”
March 21, 2013 at 12:31 pm #120186
karmuks
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Consideration paid for new shares (60%) is $520,000= it is fair value at that time/market value. If the fair value figure is not given then we calculate proportion of $520,000. 520,000x 15%/60%= 130,000.
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