if you don’t but 100% of a subsidiary then youre left with non controlling interest

2 differnet methods fair value enterprise emthod and identifiable net assets method
differencee Is the amount of goodiwll between these methods
for eg 80% of sub for 8 million means full value is 10 million
you don’t haver to split fair value Adiffernetial and carrying amount and goodiwll for the portion that relates to the parent in
n that relates to the parent in the implied method
Invetsment in Joy made us aware that the balance sheets are after the acquisition have been done

Investmnet in Joy 456,000 0.80 Acquisition cost of 80% 456,000

NCI 114,000 0.20
Total value of joy 570,000 Implied 100% 570,000
Cv of net assets (304+(-41) 263,000
Acquisitiondiffernetial 307,000
FVI
xxx 104,000
xxxxxx 20,000 124,000
Goodiwll supposed to be 183,000
Consolidtaed B/S
CV+FV=consolidated amount FVI
CV +CV Consolidateddiffernece
P and E (648+(434-114) 968,000 1,072,000 104,000
Inventory(109+224) 333,000 353,000 20,000
A/R 121,000 121,000 -
Cash 29,000 29,000 -
LTD 498,000 498,000 -
Current Liabilities 256,000 256,000 -
balamce sheets are provided AFTER the acquisition since investment is provided in sheets AND WTACH YOUR DATES
FVI method so extrapoliate method
direct costs of acquistion have been accounted for since this balamce sheet was provided AFTER THE acquisition

Acquisition costs of 70% 329,000

Implied value 100% 470,000 Nci=30%*470000 141,000.0

CV of net assets 300,000 or differnce between 480-329
Acquisition differential 170,000
Fair value increment
P and E (320-270) 50,000 Consilildated SFPunder FVE method
goodwill 120,000
P and E 720,000
Inventory 222,000
A/r 93,000
Cash 82,000
Goodwill 120,000
1,237,000

Goodiwll under FVE 120,000

Less NCI' share 30% 36,000
Goodwill parent 84,000

Consilildated SFP under INA method

P and E 720,000
Inventory 222,000
A/r 93,000
Cash 82,000
Goodwill 84,000
1,201,000
s AND WTACH YOUR DATES

d AFTER THE acquisition

LTD 348,000
CL 288,000
Ordianry shares 260,000
R/E 200,000
NCI 141,000
1,237,000

fair value of net identifiable assets= CV+FVI+ 300000+50000 350,000

LTD 348,000
CL 288,000
Ordianry shares 260,000
R/E 200,000
NCI 105,000
1,201,000
We have information on trading.market value when we do FVI menthod when we record 100% of the goodwill we have to va
FVE Method
Parent NCI

Cost of 90% (5*6300

ordinary sharesissued) 31,500.0

NCI 10% (1000*3

market price) Parent paid
premium 3,000.0
31,500.0 3,000.0

Cv of net assets
(10+12.5) 22,500.0 20,250.0 2,250.0

Acquisition difefrential 11,250.0 750.0

FVI 5,000.0
Current assets 1,200.0
LTD - 700.0
5,500.0 4,950.0 550.0
goodwill 6,300.0 200.0

NCI UNDER THE INA METHOD

Parent NCI Total

Cost of 90%
(5*6300 ordinary
sharesissued) 31,500.0
NCI 10% (1000*3
market price)
Parent paid
premium 3,000.0
31,500.0 3,000.0 34,500.0

Cv of net assets
(10+12.5) 22,500.0 20,250.0 2,250.0 22,500.0
Acquisition
difefrential 11,250.0 750.0 12,000.0
FVI 5,000.0
Current assets 1,200.0
LTD - 700.0
5,500.0 4,950.0 550.0 5,500.0
goodwill 6,300.0 200.0 6,500.0
200.0
6,300.0

NCI FVE 3,000.0

Less; share of Goodwilll 200.0
NCI-INA 2,800.0
of the goodwill we have to value the Nci portion of subsidiary using marjet price

Total

34,500.0

22,500.0

12,000.0

5,500.0
6,500.0

Coonsolidated SFP FVI(valued at full amount of goodwill and full amount of NC

Plants Asset 85,000.0 Ordinary shares
Current asse 51,200.0 NCI
Goodwill 6,500.0 R/E
142,700.0 LTD
CL

Coonsolidated SFP INA

Plants Asset 85,000.0 Ordinary shares

Current asse 51,200.0 NCI
Goodwill 6,300.0 R/E
142,500.0 LTD
CL
less NCIs shares
Goodwilll-INA
of goodwill and full amount of NCI)
61,500.0 this part is doen according to books of acquirer
3,000.0
35,000.0
18,200.0
25,000.0
142,700.0

61,500.0 this part is doen according to books of acquirer

2,800.0
35,000.0
18,200.0
25,000.0
142,500.0
Acquisition costs
Less CV
Less FVI
Goodwilll

If you don’t propelry dot he FV id assets u are acquiring goodwill is changed'when u udervalue these assets and when u sell th
hese assets and when u sell the assets and amortize throigh depreciaytion you dotn amortize it enough
In this case acquisy=tion is made after the financial statements so all relvant costs need to be recorded

Acquisition costs of 70% 14,000 Consildated B/s

Cash and receibales
Implied value 100% 20,000 Inventory
CV of net assets 30,000 Plant assers
Acquisition differential - 10,000 Intangibe assets
Fair value increment
Plant Assets - 5,500 CL
LTD 5,000 - 500 FVE LTD
negative goodwill - 9,500 NCI
Gainon purchase 9,500 THROUGH I/S CS
Goodwilll - R/E

negative goodwilll - 9,500 NCI FVE 6,000

Ncis share (30% - 2,850 Ncis shares GW 2,850
Negative goodiwlll - 6,650 GAIN NCI INA 8,850
 FVE INA
Consildated B/s
Cash and receibales 111,400 111,400
66,000 66,000
Plant assers 293,000 298,500
Intangibe assets 30,000 30,000
500,400 505,900
93,000 93,000
137,500 143,000
6,000 8,850
165,400 151,400
98,500 95,650
500,400 491,900