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hello there,
im preparing for the F7 December-’13 paper, just trying to solve few of the problems…
referring to example-9 Robertas & Ingrida on page#43, of the F7 study material, can someone help me understand how is the figure 7000 arrived at on the NCI investment calculation?cheers
CSThe NCI on proportional basis =>
Opening balance of NCI is (3000+1500+20000+6000×7/12) x 0.25 = 7000 ( 7/12 because the date of acquisition is 1/8 and 7 months is gone :D)
Post acquisition profit is (6000×5/12) x 0.25 = 625😀
Hi – the question tells us that the directors value the nci investment on a proportional basis. The fair value of the subsidiary’s net assets at date of acquisition were 28,000 and the nci holds 25% of the shares. You do the math!
🙂
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