Groups

Question 1

W2

Goodwill

Answer 1

Cost of investment
+
Non controlling interest (percentage not owned by parent x (subsidiary ordinary shares (before acq) + pre acq reserves (Ret earn at acq) + fair value adjustments on PPE)

Less:

Ordinary share capital
Pre acquisition reserves
Fair value adjustments

= goodwill at acquisition

Account for impairments + or -

Goodwill before acq

Question 2

Working 1 group structures

Answer 2

Group structures

No. Acquired ordinary shares/ number of total ordinary shares held before acquisition

= %

Question 3

W3 Retained earnings

Answer 3

Penny. Shilling

RE in SOFP

Less PAR

Less PUP

Impairment of good will

Group share of S’s post acquisition profits (percent owned x (RE SOFP -PAR - PUP )

Question 4

W4 NCI

Answer 4

Nci at acquisition (found in W2 )

+

NCI share of post acquisition profit (non controlled percent x profit )

Question 5

Working 5

Answer 5

IFRS 10 requires that profits or losses on intra group transactions should be eliminated in full on consolidation

Dr (reduce ) the selling companies retained earnings

CR(reduce) group inventories

Question 6

Groups

Answer 6

Add PPE

If a company has control add all of the current assets and liabilities together