Consolidation: calculation of goodwill per IFRS 3

04082010, 04:42 PM
Post: #1




Consolidation: calculation of goodwill per IFRS 3
how to calculate the goodwill as per change in IFRS3?


04132010, 09:07 PM
Post: #2




Goodwill represent excess of the purchase consideration paid in an acquisition over the fair value of net identifiable assets acquired.
Suppose, you paid Rs.10 million to acquire Rs.8 million net assets (here Rs.8 million is fair value of net assets acquired). Rs.2 million will be goodwill acquired. 

04202010, 08:46 PM
Post: #3




Calculation of goodwill is categorised under two heads 1) partial goodwill method 2) Full goodwill methhod
Under partial goodwill method only Parent's shareholding is considered For example Cost of the Investment is Rs....1200000 Acquired interest in the subsidiary's assets is 80% subsidiary's net identifiable assets are 1400000 So here the amount of goodwill is to be calculated as Cost of Investment 1200000 Net assets of subsidiary 1400000 Parents interest (80%) (1120000) goodwill 80000 Under full goodwill method minority's interest of goodwill is also included.The fair value of minority's interest is taken care of and either to be calculated or is given in the question. Keeping other things same as in the above example now we calculate goodwill under full method when the fair value of minority's interest is 350000 the Full goodwill is cost of Investment 1200000 Subsidiary's net assets 1400000 Parents share (80%) (1120000) Parents share of goodwill 80000 Fair value of minority's interest 350000 subsidiary's net assets 1400000 Minority's interest (20%) (280000) Minority's share of goodwill 70000 Total goodwill 150000 

« Next Oldest  Next Newest »

User(s) browsing this thread: 1 Guest(s)