Page 463 - F2 Integrated Workbook STUDENT 2019

Answers

Chapter 12

Example 12.1

Goodwill
$

Fair value of consideration transferred by P (Birdie)
Cash 2,500

Shares (60% × 5,000 × 1/5 × $3.25) 1,950
Deferred consideration ($1,500 × 0.907) 1,361

Contingent consideration 500
–––––

6,311
Value of NCI at acquisition (at fair value) 5,000

Fair value of sub's net assets at acquisition (7,500)
–––––

Goodwill on acquisition 3,811
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Note: the legal and professional fees are not included in the calculation of
goodwill. They should be expensed to the statement of profit or loss.

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