Question on Consolidation accounts

If you look at working (iv) in the printed solution, you'll see that $3,000 goodwill impairment has been deducted from the subsidiary post acquisition retained earnings and then our 75% has been applied to the resultant figure of 3,200 The answer could have, instead, taken 75% of the adjusted figure for the subsidiary post acquisition retained earnings and then, separately, deducted just our share of the goodwill impairment " and not in the Nci and group retained earnings calculation." I've just explained how it IS taken into account in the consolidated retained earnings calculation As for the nci, working (v) in the solution shows the nci being credited with their share of the subsidiary's post-acquaiition profits for this year But those profits of $3,200 have been arrived at after deducting the goodwill impairment Is that any better?

@mikelittle said: If you look at working (iv) in the printed solution, you'll see that $3,000 goodwill impairment has been deducted from the subsidiary post acquisition retained earnings and then our 75% has been applied to the resultant figure of 3,200 The answer could have, instead, taken 75% of the adjusted figure for the subsidiary post acquisition retained earnings and then, separately, deducted just our share of the goodwill impairment " and not in the Nci and group retained earnings calculation." I've just explained how it IS taken into account in the consolidated retained earnings calculation As for the nci, working (v) in the solution shows the nci being credited with their share of the subsidiary's post-acquaiition profits for this year But those profits of $3,200 have been arrived at after deducting the goodwill impairment Is that any better?

Assuming I had made the error of not deducting it from the post acquisition reserves of the net assets of the subsidiary but then carried on for the remaining workings. I would get goodwill to be 5,000 still. Nci = fv of Nci at acquisition = 15000 + Nci share of post acquisition reserves = 25% x 6200 = 1550 Less Nci share of impairment = -25% x 3000 = -750 Nci = 15800 Group retained Earnings = 50200 + Parents share of post acquisition reserves = 75% x 6200 = 4650 - Unwinding on deferred consideration = -900 - Purp = -600 +Gain on investment = 1700 - parents share of impairment = 75% x 3000 = -2250 Group retained earnings = 52800 Would this be acceptable and I was worried if I go wrong using this method it will lose more marks or should I follow the way it is shown in the exam answers.

"+ Nci share of post acquisition reserves = 25% x 6200 = 1550" No! The subsidiary retained profits need to be adjusted for all those other subsidiary adjustments like pups. extra depreciation and so on to arrive at a post-acquisition figure (not adjusted for goodwill) From that we can calculate the nci share of those post acq profits, add that figure to nci as at date of acquisition and then, from that sub-total we deduct the nci share of the goodwill impairment Watch some of the past exam question videos that I recorded showing how the nci is calculated (they're called "F7 Revision" on the index of the F7 home page)