03-01-2010, 01:14 PM
Dear,
Your reply is correct in the context of proportionate goodwill method...I know the treatment but my question is that if your are using full goodwill method and then negative goodwill of minority arise then what will be the treatment...ok for more ease, let take an example
Statement of Financial Position as at December 31, 2010
ASSETS H S
PPE 100,000 80,000
Investment in S 50,000 -
Current assets 60,000 30,000
------- -------
210,000 110,000
======= =======
EQUITY + LIABILITIES
Share Capital 120,000 65,000
Retained earning 50,000 30,000
Current Liabilities 40,000 15,000
------- -------
210,000 110,000
======= =======
H acquire 80% shares of S Ltd at January 1st, 2010. Retained earning at that date was zero and fair value of NCI share was Rs. 12,000.
Now using full goodwill method prepare statement of financial position as at 31st December, 2010.
Your reply is correct in the context of proportionate goodwill method...I know the treatment but my question is that if your are using full goodwill method and then negative goodwill of minority arise then what will be the treatment...ok for more ease, let take an example
Statement of Financial Position as at December 31, 2010
ASSETS H S
PPE 100,000 80,000
Investment in S 50,000 -
Current assets 60,000 30,000
------- -------
210,000 110,000
======= =======
EQUITY + LIABILITIES
Share Capital 120,000 65,000
Retained earning 50,000 30,000
Current Liabilities 40,000 15,000
------- -------
210,000 110,000
======= =======
H acquire 80% shares of S Ltd at January 1st, 2010. Retained earning at that date was zero and fair value of NCI share was Rs. 12,000.
Now using full goodwill method prepare statement of financial position as at 31st December, 2010.
