Page 431 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Answers

Example 15.1 cont'd

(i) Goodwill (W3 within CSOFP)

$ $
Fair value of P’s Investment
Fair value of previously held interest 79,000
Fair value of consideration for additional interest 52,500
––––––––
131,500
NCI at proportion of net assets (40% × 150,000) 60,000
st
Fair value of net assets at acquisition (31 Dec 20X4)
Share capital 75,000
Retained earnings 75,000
(150,000)
––––––––
41,500

(ii) Retained earnings (W5 within CSOFP)
$
Ziggys RE’s 187,500
P’s % of S’s post-acquisition profits (60% × (91,500 – 75,000)) 9,900
Gain on re-measurement to fair value of original investment 11,500
(35%)
––––––––
208,900
––––––––

423