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Can please some help me with goodwill in this question. Why is non controlling interest not included in calculation of goodwill of park and caller. Many thanks
If you look at the question point 2 it says ”It is the group’s policy to measure the non-controlling interest at acquisition at its proportionate share of the
fair value of the subsidiary’s net assets.”Proportionate Goodwill or Partial Goodwill is where the NCI is valued at its proportionate share of net assets and is assumed to have no ownership of goodwill.
It is a complex group question
The group have direct and indirect ownership of caller
The direct ownership is 14%
The indirect ownership is 60% x 70%=42%
Combined ownership 56%
NCI 44%we can calculate goodwill for this question as follows:
fv of direct ownership (at june 2012 when Trailer got control) $280
fv of indirect ownership 1270 x 60% = 762
f.v of nci 44% (1150×44% as it is valued at proportionate share of net assets) 506
less: fv of net assets (1150)Goodwill $398
[280+762+506-1150=398]
I hope it will help you.
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