On January 1, 20x1, AAA Co. acquired 30% ownership interest in BBB, Inc. for ₱200,000. Because the investment gave AAA significant influence over BBB, the investment was accounted for under the equity method in accordance with PAS 28. From 20x1 to the end of 20x3, AAA recognized ₱100,000 net share in the profits of the associate and ₱20,000 share in dividends. Therefore, the carrying amount of the investment in associate account on January 1, 20x3, is ₱280,000. On January 1, 20x4, AAA acquired additional 60% ownership interest BBB, Inc. for ₱1,600,000. As of this date, AAA has identified the following: a. The previously held 30% interest has a fair value of ₱360,000. b. BBB’s net identifiable assets have a fair value of ₱2,000,000. c. AAA elected to measure non-controlling interests at the non-controlling interest’s proportionate share of BBB’s identifiable net assets. Requirement: Compute for the goodwill.
On January 1, 20x1, AAA Co. acquired 30% ownership interest in BBB, Inc. for ₱200,000. Because the investment gave AAA significant influence over BBB, the investment was accounted for under the equity method in accordance with PAS 28.
From 20x1 to the end of 20x3, AAA recognized ₱100,000 net share in the profits of the associate and ₱20,000 share in dividends. Therefore, the carrying amount of the investment in associate account on January 1, 20x3, is ₱280,000.
On January 1, 20x4, AAA acquired additional 60% ownership interest BBB, Inc. for ₱1,600,000. As of this date, AAA has identified the following:
a. The previously held 30% interest has a fair value of ₱360,000.
b. BBB’s net identifiable assets have a fair value of ₱2,000,000.
c. AAA elected to measure non-controlling interests at the non-controlling interest’s proportionate share of BBB’s identifiable net assets.
Requirement: Compute for the
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