acquired 80% of the issued shares of Sinatra Ltd for $250,000. At that date, Sinatra Ltd's equity consisted of share capital of $200,000 and retained earnings of $300,000.
acquired 80% of the issued shares of Sinatra Ltd for $250,000. At that date, Sinatra Ltd's equity consisted of share capital of $200,000 and retained earnings of $300,000.
acquired 80% of the issued shares of Sinatra Ltd for $250,000. At that date, Sinatra Ltd's equity consisted of share capital of $200,000 and retained earnings of $300,000.
On 1 July 2019, Frankie Ltd acquired 80% of the issued shares of Sinatra Ltd for $250,000. At that date, Sinatra Ltd's equity consisted of share capital of $200,000 and retained earnings of $300,000. At acquisition date, all identifiable net assets of Sinatra Ltd were recorded at amounts equal to fair value. At 1 July 2019, the fair value of the non-controlling interest was $50,000. Required: (a) Calculate goodwill using the partial goodwill method. (b) Explain the reason why an adjustment is required to the NCI share of profit, for a non-current asset revalued to fair value at acquisition date.
Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).
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