Problem 2: Goodwill Calculation HB paid $2.50 per share to acquire 100% of PNs equity shares on 1 September 2009. At that date PNs statement of financial position showed the following balances with equity: $000 Equity shares of $1 each 180 Share premium 60 Retained earnings 40 PNs net asset values were the same as their book values, except for land which was valued at $70,000 more than its book value. HB directors estimate that any goodwill arising on the acquisition will have a useful life of 10 years. Required: (i) Calculate goodwill arising on the acquisition of PN. (ii) Explain how HB should record the goodwill in its group financial statements for the year ended 31 August 2010, in accordance with IFRS 3 Business Combinations. .