On 30 June 2004, C purchased 75% of the equity shares of D for $16 million. The

Question:

On 30 June 2004, C purchased 75% of the equity shares of D for $16 million. The statement of financial position of D showed net assets of $14 million. This was before taking account of the following items:
• The market value of D's properties at 30 June 2004 (included in the statement of financial position of D at a carrying value of $8 million) was $10 million.
• On 30 June 2004, D was in the process of negotiating an insurance claim in respect of inventory that was damaged before that date. The claim was for $1 million and, although nothing has yet been received, the directors of Dare confident that the claim will be successful.
What is the on consolidation that will appear in the consolidated statement of financial position of C at 30 June 2004?
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...