FR (Page 312)

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Ordinary share capital of subsidiary x Capital reserves or date of acquisition x Revenue reserves (retained profits) on date of acquisition x Shareholders funds on date of acquisition xx Holding company shares acquired (x) GOODWILL POSITIVE/NEGATIVE xx Method 2 £ Cost of investment in subsidiary xx Less: share of net assets acquired (on date of acquisition) (x) xx/(xx) NOTE :Total assets less total liabilities i.e. net assets is the same as shareholders funds. The most common approach used in computing goodwill is by preparing an account called cost of control whereby the cost of investment is posted on the debit side and the holding company share of the ordinary share capital, capital reserves and revenue reserves on the date of acquisition in the subsidiary company are posted onthe credit side. The balancing figure in
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