Page 26 - Finac2 Test 1 Slides - 2. Business Combinations

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Goodwill example

• A Limited acquired control with the acquisition of

an 80% interest in B Limited for R1 100 000 on 1

January 20.8. On this date the share capital of B

Limited was R200 000 consisting of 200 000

ordinary shares and the retained earnings

amounted to R800 000. The fair value of the net

assets of B Limited amounted to R1 000 000 on 1

January 20.8.

• The market value of the shares of B Limited on 1

January 20.8 amounted to R7 per share.

26