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Chapter 20

CHAPTER 12 – BASIC GROUPS ACCOUNTS

Example 12.1

Proportion of net Fair value
assets method (i) method (ii)

$000 $000

Cost of investment 2,220 2,220
NCI - Proportionate (20% × 1,850 (W2)) 370
NCI - Fair value (given) 462.5

Less: S's net assets at acquisition (W2) (1,850) (1,850)
–––––– –––––––

Goodwill at acquisition 740 832.5
–––––– –––––––

(W1) Group structure - Silvio acquired 80% of Carmela on 1 April 20X8. NCI =
20%

(W2) Net assets of subsidiary

Acquisition

$000
Share capital 370
Retained earnings 1,480

–––––
1,850

–––––

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