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Assume that Company A acquires 70 per cent of Company B for a cash price of $14 million when the share capital and reserves of

Assume that Company A acquires 70 per cent of Company B for a cash price of $14 million when the share capital and reserves of Company B are:

Share capital

$8 million

Retained earnings

$2 million

$10 million

  1. What amount of goodwill will be shown in the consolidated statement of financial position pursuant to AASB 3 assuming that any non-controlling interest in the acquirer is measured at fair value? (1 marks)

  1. What amount of goodwill will be shown in the consolidated statement of financial position pursuant to AASB 3 assuming that any non-controlling interest in the acquirer is measured at the non-controlling interests proportionate share of the acquirees identifiable net assets? (1 marks)

  1. Pass the necessary consolidation journal entries and the journal entries to record the non-controlling interest if the non-controlling interest in the acquirer is measured at the non-controlling interests proportionate share of the acquirees identifiable net assets. (4 marks)

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