Page 274 - SBR Integrated Workbook STUDENT S18-J19

Chapter 18

The non-controlling interest

The non-controlling interest at acquisition can either be measured:

 at fair value – this calculates full goodwill (P’s goodwill + NCI’s goodwill)

 proportionately – this calculates P’s goodwill only.

The method used to measure the NCI should be decided separately for each
acquisition.

Example 8

The non-controlling interest

Following on from Examples 6 and 7, the fair value of the non-controlling
interest at the acquisition date is $11 million.

Calculate the goodwill arising on the acquisition of Pan if the non-
controlling interest at acquisition is measured at:

(a) fair value

(b) its proportionate share of the fair value of the subsidiary’s
identifiable net assets.

268