A) A Parent Company acquired 60% equity interest in a subsidiary company for £440 million. The Market value of the net assets of the Subsidiary on acquisition date was £400 million. The Parent Company estimates that the full 100% interest in the subsidiary company would have cost £640 million You are required to: A) Calculate the goodwill at acquisition date where non-controlling interest is measured I. As a proportionate share of the net assets of the subsidiary company. II. At fair value (The Full good will method).
A) A Parent Company acquired 60% equity interest in a subsidiary company for £440 million. The Market value of the net assets of the Subsidiary on acquisition date was £400 million. The Parent Company estimates that the full 100% interest in the subsidiary company would have cost £640 million You are required to: A) Calculate the goodwill at acquisition date where non-controlling interest is measured I. As a proportionate share of the net assets of the subsidiary company. II. At fair value (The Full good will method).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A) A Parent Company acquired 60% equity interest in a subsidiary company for £440
million. The Market value of the net assets of the Subsidiary on acquisition date was £400
million. The Parent Company estimates that the full 100% interest in the subsidiary
company would have cost £640 million
You are required to:
A) Calculate the goodwill at acquisition date where non-controlling interest is
measured
I.
As a proportionate share of the net assets of the subsidiary company.
I.
At fair value (The Full good will method).
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