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Regarding consolidation sec A question bpp kit

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Regarding consolidation sec A question bpp kit

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 10, 2021 at 4:30 pm #624446
    aamnasalim
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    Q-Crash Co acquired 70% of Bang Co’s 100,000 $1 ordinary shares for $800,000 when the retained earnings
    of Bang Co were $570,000.
    Bang Co also has an internally developed customer list which has been independently valued at $90,000. The
    non-controlling interest in Bang Co was judged to have a fair value of $220,000 at the date of acquisition.
    What was the goodwill arising on acquisition?
    A $130,000
    B $450,000
    C $380,000
    D $350,000

    my question is that I took 90000(customer list) as fair value adjustment of S.co at acquisition date while calculating goodwill ,but in the answer they have not taken it . why???

    June 19, 2021 at 7:26 am #625748
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6460
    • ☆☆☆☆☆

    Hi,

    I think they are trying to catch you out (unfairly) by saying that it is independently valued, as I suppose that this is not technically the fair value of the customer list. There should be some explanation in the answer as to why they have not taken it and if there isn’t then it is disappointing.

    Thanks,

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    Posts
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