Unit 11 - Grp Rep - Consol Fin Stat

Calculation of goodwill 000 cost of investment in s

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Unformatted text preview: (280) (40) 1,020 (20) 1,000 16 Example 1 - Solution (1) Consolidation Schedule (Assume book value equals to fair value) 1. Calculation of goodwill: $000 Cost of investment in S Ltd (80%) FV of NCI (3,800/80%x20%) FV of S Ltd (at acquisition date) Less: FV of net assets of S Ltd (at acquisition date) Share capital Retained profits (pre-acquisition profits = $1,000 x 6/12) Goodwill (at acquisition date) - Parent’s share at 80% - NCI’s share at 20% $000 3,800 950 4,750 3,000 500 3,500 1,250 1,000 250 1,250 17 Example 1 - Solution (1) Consolidation Schedule 2. Non-controlling interests (at reporting date): Share capital Retained profits (pre+post profits) FV of net assets of S Ltd $000 3,000 1,000 4,000 NCI’s share at 20% NCI’s share in goodwill FV of NCI (at reporting date) 800 250 1,050 18 Example 1 - Solution (1) Consolidation Schedule 3. Consolidated retained profits (for the parent): $000 H Ltd S Ltd: Retained profits at reporting date 1,000 Less: pre-acq. profits ($1,000 x 6/12) 500 post-acq. profits 500 Parent’s share at 80% $000 1,900 400 2,300 Note: Pre-acquisition profits = $500k (retained profits at acquisition date) 80% eliminated...
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This document was uploaded on 04/03/2014.

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