Step 2: Analysis of net assets Share capital 320,000 320,000 200,000 200,000 Ret.

earnings 120,000 208,000 40,000 112,000

120,000 208,000 40,000 112,000 Totals at carrying amts. 440,000 528,000 240,000 312,000 FVA at acquisition date - - - - Depreciation of
uisition date - - - - Depreciation of FVA NIL - NIL - Step 3: Goodwill computation The impairment loss on goodwill is determined as follows:
oodwill is determined as follows: Formula #1: S 1 S 2 Total Consideration transferred (given) 400,000 200,000 Indirect holding adjustmen
00,000 Indirect holding adjustment (40,000) NCI in the acquiree – at fair values (given) 100,000 160,000 Prev. held equity interest in the ac
Prev. held equity interest in the acquiree - - Total 500,000 320,000 Fair value of net assets acquired (Step 2) (440,000) (240,000) Goodwill
p 2) (440,000) (240,000) Goodwill at acquisition date 60,000 80,000 Multiply by: Impairment (given) 20% 20% Impair ment loss on goodw
% 20% Impair ment loss on goodwill - 20x1 12,000 16,000 28,000 An indirect holding adjustment is made because the consideration trans
e because the consideration transferred to S2 is not wholly made by P but rather partly by P (80%) and partly by S1 (20%). Only the portio
partly by S1 (20%). Only the portion effectively transferred by P (₱200,000 x 80% = ₱160,000) enters into th