past exam paper Jun 2008 Patronic BPP revision kit Q44

If we were calculating the nci on the SofFP, we would take value at date of acquisition + their share of post acquisition profit after tax – their share of any impairment.

But for working 4b, we need the nci share of this year’s consolidated profit after tax. 9,000 we agree and (600) we agree. The figure of 29,000 in the SofI is an amount which has already suffered the full amount of the goodwill impairment of 2,000. Therefore, of this amount of 29,000 ( net of goodwill impairment ) the nci is entitled to their share of 9,000 – 600. The nci’s share of the goodwill impairment is already included within the SofI expense of 2,000. You can’t keep on taking it away from this poor minority!

Again, to repeat myself, if we were calculating working 4a, the 500 share of nci impairment would have been deducted from the value at DoA plus their share of post acquisition retained. But we’re not! We are only preparing the SofFP

Hope that helps!

Hi again

I don’t have the questions with me – contrary to common perception, I’m not looking at F7 past exam questions all day every day!

Let’s just go over the basics again! For working 4a, the value of the nci on the SofFP, take Value at date of acquisition, add their share of subsidiary post acquisition retained profits and then deduct their share of any goodwill impairment since acquisition.

For working 4b, calculate the nci’s share of this year’s subsidiary, adjusted, time-apportioned, profit after tax. That’s the figure to be shown as a note at the foot of the SofI ( and a second figure ( effectively the same, but applied to Comprehensive Income ) is shown at the foot of the SofCI.