Page 311 - F3 -FA Integrated Workbook STUDENT 2018-19

Consolidated financial statements I

Working 3 – Goodwill – full goodwill method

(W3) Goodwill

$000
Fair value of consideration paid:
Cash paid at date of acquisition (1) X

Fair value of shares issued (2) X

––––
X
(3)
Fair value of NCI at acquisition X (to W4)
Less: Fair value of net assets acquired (from W2) (X)
––––

Goodwill at acquisition X (to SOFP)
––––

Key issues

(1)
Ref = this may be cash paid and identified in the parent statement of
financial position. Sometimes, it is disclosed within the information in
the notes to the question. The fair value of consideration paid is either
cash paid at the date of acquisition and/or the fair value of the shares
issued by the parent to acquire the shares in the subsidiary via a share
exchange.

Ref (2) = if control was acquired by a share-for-share exchange, then
check to ensure that the parent entity SOFP reflects the share issue. If
it does not, the following accounting entries will be required:
$000

Debit: Cost of investment in subsidiary X
Credit: Share capital (NV of shares issued) X

Credit: Share premium (premium on shares issued) X

Ref (3) = information included in the notes to the question.

305