ACCA FR Syllabus D. Preparation Of Financial Statements - Use either proportionate or FV NCI - Notes ^{3 / 5}

Proportionate method

Here NCI gets its % of S's NA

1. % of S's NA (at fair value)

2. No goodwill in S is given to NCI

Let's say the parent acquires 80% of a subsidiary with net assets of 100.

NCI would receive 20 at acquisition

The goodwill calculation would look like this...

Fair Value

Here NCI get their % of NA AND goodwill

1. % of S's NA (at fair value)

2. % of S's Goodwill

Let's say the parent acquires 80% of a subsidiary with net assets of 100.

NCI would receive the FV of its holding at acquisition

This would be given in the exam or calculated as NCI shares x share price

Let's say this is 28

The goodwill calculation would look like this...