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Dear Sir,
In the chapter Disposal of Subsidiaries, why do we take only the parent’s share of goodwill to account for the group profit or loss?
We add the full NCI, so why don’t we deduct the full goodwill too, in order to arrive at the “Group Profit or Loss on disposal”?Regards and thanks for the constant support,
SharadHi,
The example assumes that we have calculated the goodwill using the full goodwill method, given we’re given the fair value of the goodwill at the acquisition date. If this is the case then we are deducting the full goodwill in the subsidiary.
If the goodwill was calculated using the partial goodwill method then we would need to adjust the goodwill to gross it up to the full goodwill in the calculation.
Thanks and glad to be of support.
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