Query on NCI

Please give me a page reference / chapter reference / question number

Page 201 4. Goodwill Impairments Question1(c) Question2(c) Question3(c) The answer for the above questions are on page 230, 231 and 232

The questions ask you for the value of the goodwill, not the value of the nci! We can't find the value of the nci because we don't know the extent of the subsidiary post acquisition retained earnings

Sorry.. The question asked us for the Goodwill. We need the NCI Investment valuation for the calculation of goodwill. So that's the calculation I'm talking about which needs to be checked.

You don't need the value of the nci investment! You are told that the nci GOODWILL is $XXX Therefore the nci investment value is equal to their proportionate share of fair valued net assets + their goodwill Have you not watched the lectures? I go through that in great detail within the lectures

I don't think you understood what I am asking for. The NCI's proportionate share of fair value of net assets is what I am talking about here. I am writing the entire question and the answer as given in the notes. H acquired 60% of the 500,000 $1 shares in S for $470,000. At that date the S retained earnings were $200,000. Goodwill has been impaired by 40% Calculate the goodwill figure which will appear on the statement of financial position if the if the directors valued the goodwill attributable to the NCI at $15,000 Answer given is as follows Cost of Investment 470,000 NA@DOA 700,000 H's Share(60%) (420,000) Difference 50,000 NCI Goodwill 15,000 Total Goodwill 65,000 Impairment (40%) (26,000) Net 39,000 Now should that NA @ DOA be H's share or NCI share? Don't you think it should be NCI share of 40% rather than H's share of 60%?

I fully understand your question! Let's try it this way: Cost of acquisition 470,000 Nci investment = proportional share of net assets + their share of goodwill (ie ((40% x 700,000) + 15,000) = 295,000 Total value of investment in S is 470,000 + 295,000 = 765,000 Value of net assets is 700,000 So goodwill is 65,000 It's impaired by 40% ie by 26,000 So goodwill in answer to the question is 39,000 The answer that you have written above is correct. That answer is looking specifically at finding the goodwill attributable to the parent (50,000) and then adding on the nci goodwill (15,000 - given in the question) I ask again - have you watched the lectures where I go through this in detail?

Thanks. Yes I have watched the lectures. Just got confused in the way they arrived at the answers.

You're welcome