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Chapter 12
Example 12.1
Silvio purchased 80% of the equity share capital of Carmela for $2,220,000 on
1 April 20X8. Carmela’s share capital is made up of 370,000 $1 shares and it
had retained earnings of $1,480,000 at the date of acquisition. The fair value of
the NCI at 1 April 20X8 was $462,500.
Required:
Calculate the goodwill arising on the acquisition of Carmela, valuing the
NCI:
(i) using the proportion of net assets method
(ii) using the fair value method
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