Comprehensive Examples - Step Acquisition
SFP for YEAR 6
|Non Current Asset||500||600|
|Investment in S||250|
|Non Current Liabilities||300||250|
P acquired 30% S in year 1 for 60. It acquired another 30% in year 4 for 140
S’s reserves were 10 in year 1 and 60 in year 4.
FV of S’s NA in year 1 was 120 and in year 4 190. Difference is due to Land.
FV of NCI in year 4 was 90.
FV of 30% holding in Year 4 is 120.
P acquired a further 10% of S on the last day of year 6 for 50.
Show the Consolidated SFP at the end of year 6.
Step 1: Equity Table
Step 2: Goodwill
|Consideration||260 (140 + 120)|
|FV of Net Assets Acquired||(190)|
Step 3: NCI
|NCI @ Acquisition||90||(given)|
|NCI % of S’s post acquisition profits||136||(40% x 340)|
|NCI on the SFP before further acquisition||226|
|Less further acquisition||(57) 226 x 10/40|
|NCI on the SFP after further acquisition||169|
Step 4: Further Acquisition from NCI
|FV of consideration||(50)|
|Decrease in NCI||57|
|Difference - goes to Equity of the Parent||(7)|
Step 5: Reserves
|S||204||(60% x 340)|
|Gain on Revaluing original 30%||60|
|Movement due to further acquisition||7|
|Non-Current Asset||500||600||1,130 incl. FV land adj.|
|Investment in S||250||Goodwill||160|