Question
Goodwill is typically recognised as part of the consolidation process, therefore, goodwill will be recognsed in the consolidated financial statements but will not appear
Goodwill is typically recognised as part of the consolidation process, therefore, goodwill will be recognsed in the consolidated financial statements but will not appear in the separate financial staternents of the parent entity or subsidiary. When performing a consolidation we eliminate the parent entity's interest in the pre- acquisition share capital and reserves of the subsidiary against the cost of the investments with any difference being of the nature of goodwill, or excess (gain on bargain purchase) on consolidation. Because the investment in the subsidiary is eliminated as part of the consolidation process then it is an account that will appear in the statement of financial position of the parent entity, but will not appear in the consolidated financial staternents.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started