1.Assume that Company A acquires 70% of Company for a cash price of $10 million when the share capital and reserves of Company B are:

Share capital$8 million

Retained earnings $2 million

$10 million

(a)What amount will be shown in the consolidated statement of financial position for goodwill pursuant to AASB 3 assuming that any non-controlling interest in the acquired is measured at fair value?

(b)What amount will be shown in the consolidated statement of financial position or goodwill pursuant to AASB 3 assuming that any non-controlling interest in the acquiree is measured at the non-controlling interest's proportionate share of the acquiree's identifiable new assets?

(c)What are some of the implications of allowing the group to have two options in accounting for goodwill on consolidation?