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Sir please help with goodwill.
Park
Consideration tranferred. 1250
Nci 1950×40% 780
Less Fvna
Capital+re+oce+ fv(land)
1950×60% (1170)Goodwill=470(before impairment)
Then how answer is showing 80.Why in the answer they didnt included NCI.
I am really getting confused please help.
What’s $1,250 + $780?
$2,030
What’s $2,030 – $1,950?
$80!
Put another way …. parent invests $1,250 to acquire 60% of net assets
Net assets are $1,950 …. so 60% of those net assets is $1,170
Goodwill attributable to the parent is $1,250 less $1,170 = $80
Or, put another way! Parent invests $1,250 and nci is 40% x $1,950 = $780
Total “worth” of the subsidiary is $1,250 + $780 = $2,030 and fair valued net assets are 60% * $1,950 (ie $1,170) attributable to the parent and 40% * $1,950 (ie $780) attributable to the nci
So, if nci value is $780 and their share of assets is also $780, how much goodwill is attributable to the nci?
Correct! $NIL! And that’s what is meant when the examiner says that the nci is valued on a proportional basis
OK?
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