Question
Parent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The carrying value of Subsidiary Company's net assets at the time of
Parent Company purchases 80% of the outstanding shares of Subsidiary Company for P9,000,000. The carrying value of Subsidiary Company's net assets at the time of acquisition was P6,000,000 and had a fair value of P8,000,000. Determine the following:
- Goodwill arising from the consolidation if it is to be computed using the full (fair value basis of "Full/Gross-up" Goodwill, assuming the cost of acquisition includes a control premium ofP400,000.
- Non-controlling interest arising from the consolidation if it is to be computed using the full (fair value basis of "Full/Gross-up" Goodwill, assuming the cost of acquisition includes a control premium of P400,000.
- Goodwill arising from the consolidation if the non-controlling interest is stated at fair value of P2,000,000.
- Goodwill arising from the consolidation if the 100,000, P50 par value shares of the subsidiary are currently selling at 90/share.
- Assume Parent purchased 80% of Subsidiary shares for P6,300,000; determine the goodwill arising from the consolidation if the non-controlling interest is stated at fair value of P2,000,000.
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Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
