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The above question is from BPP revision kit
IN Part B can you please explain the unwinding discount on deferred cinsideration of 135.. How and why is this been calculated, what is even mean and why is it negative.
Also, in NCI – Goodwill is shown as 4,500 why is that the case,
For the unwinding of the discount we record the deferred consideration at fair value (=present value) DR Investment CR Deferred consideration.
We then need to grow this value to the final value DR Finance Cost CR Deferred consideration, which is called unwinding the discount.
The NCI is the number of shares the NCI own (20% of the 9,000) valued at the price of a S share, being $2.50.