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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › OT Notes, chapter-3-more-complex-group-part 2 example 3-Matis
Hello
I do not understand why in the answer to this question for the goodwill calculation of M in V, the NCI of 52%, $61,360 is included while in examples 1 & 2 it is not included.
Hi,
In examples 1 and 2 the goodwill in the sub-subsiidary is measured using the proportionate share of net assets method, so the goodwill calculation will just take the investment less the share of net assets acquired.
In example 3 the goodwill in the sub-subsidary is measured using the fair value method and so the goodwill calculation will take the investment plus the FV NCI less the net assets acquired.
The key is to identify the method of calculating the goodwill. Is it proportionate share of net assets (partial goodwill) or the fair vale method (full goodwill).
Thanks