Page 340 - F1 Integrated Workbook STUDENT 2018

Chapter 19

(b) Fair value method

(W3) Goodwill

$000
Fair value of investment 1,540
Value of NCI at acquisition (given in question) 220
Fair value of net assets (NAs) acquired (100% × 1,030) (W2) (1,030)
Impairment (120)
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Goodwill at acquisition 610
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(W4) Non-controlling interests

$000
Value of NCI at acquisition (as per W3) 220
NCI × post-acquisition reserves 20% × (1,110 – 1,030) (W2) 16
NCI × impairment (W3) (20% × 120 ) (24)
––––
NCI at reporting date 212
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(W5) Retained earnings

$000
Parent 3,000
Subsidiary (% × post acquisition profits)
80% × (1,110 – 1,030) (W2) 64
Impairment (W3) (80% × 120) (96)
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2,968
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