When calculating good will the non controlling interest is suppose to be added to the investment in shares in the subsidiary. I have seen a question where it is subtracted . What is the reason for this?
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The non controlling interest
5y ago#1The fair value of the non-controlling interest at the date of acquisition is indeed added to the consideration paid for the shares purchased in the subsidiary. (We then subtract the share capital and pre-acquisition reserves in order to arrive at the figure for goodwill.)
If you have seen an answer that appears to do differently, then it would seem that either there is an error in the answer or that you have misunderstood either the question or the answer.
If it is a question in the current edition of the BPP Revision Kit then tell me which question and I will check and explain.
Have you watched my free lectures on this? The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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