Computation of goodwill ACE acquired 80% interest in SER on 1 January x4. The consideration transferred consisted of 1 million ordinary shares in ACE and a cash payment of RM2 million in a year's time if SER were to achieve a 20% increase in its profits within a year. The fair value of one ordinary share of ACE on 1 January x4 was RM4. The present value of RM2 million in a year's time would be RM1.8 million. Transactions costs incurred amounted to RM400,000 which was all directly attributable to the purchase of the shares in SER. ACE is not confident SER will achieve the post-period profit target. On 1 January x4, the capital and reserves of SER were: Ordinary share capital Retained profits RM 2,000,000 2,000,000 Requireds a. Calculate in accordance with MFRS 3 the goodwill on 1 January x4 where: i. goodwill recognised is limited to the parent's interest only. i goodwill is at fair value, where the fair value of non-controlling interest was RM1,360,000