www.kaplanpublishing.co.uk Section Introducing fair values Question Dolphin Two years ago a parent company paid $90,000 for an investment of 80% of a subsidiary's equity when the retained earnings were $25,000 An extract of the statement of financial positions at the reporting date shows; Ordinary shares ($1) Retained earnings Parent Subsidiary $ $ 25,000 15,000 100,000 40,000 125,000 55,000 The fair value of the NCI at the date of acquisition was $20,000 It is group policy to measure the NCI at acquisition at fair value For consolidation purposes an upwards fair value adjustment of $25,000 was made on certain items of property plant and equipment which at the date of acquisition had a remaining life of five years By the reporting date goodwill has been impaired by $1,000 Required a) Calculate the goodwill at the reporting date b) Prepare the equity section of the group statement of financial position A student's guide to Group Accounts by Tom Clendon, Second Edition, published by Kaplan Publishing www.kaplanpublishing.co.uk Section Introducing fair values Question Seal Two years ago a parent company paid $90,000 for an investment of 80% of a subsidiary's equity when the retained earnings were $25,000 An extract of the statement of financial positions at the reporting date shows; Ordinary share ($1) Retained earnings Parent Subsidiary $ $ 25,000 15,000 100,000 40,000 125,000 55,000 The fair value of the net assets of the subsidiary at the date of acquisition was $65,000 The increase in the fair value is attributable to a fair value adjustment in respect of land By the reporting date goodwill has been impaired by $2,000 It is the policy of the group to measure NCI at acquisition as a proportion of net assets Required a) Calculate the goodwill at the reporting date b) Prepare the equity section of the group statement of financial position A student's guide to Group Accounts by Tom Clendon, Second Edition, published by Kaplan Publishing www.kaplanpublishing.co.uk Section Introducing fair values Question Sea lion The following information relates to an 80% subsidiary which is a cash-generating unit It is group policy to measure the NCI at acquisition at fair value Net assets at acquisition Net assets at year-end $m 100 $m 150 Fair value of the NCI at acquisition $m 25 Cost of the investment at acquisition $m 200 Recoverable amount at year-end $m 255 Required Calculate the impairment loss arising on the impairment review and show its accounting treatment A student's guide to Group Accounts by Tom Clendon, Second Edition, published by Kaplan Publishing www.kaplanpublishing.co.uk Section Introducing fair values Question Walrus The following information relates to an 80% subsidiary which is a cash-generating unit It is group policy to measure the NCI at acquisition as a proportion of net assets Net assets at acquisition $m 100 Net assets at yearend $m 150 Cost of the investment at acquisition $m 200 Recoverable amount at year-end $m 255 Required Calculate the impairment loss arising on the impairment review and show its accounting treatment A student's guide to Group Accounts by Tom Clendon, Second Edition, published by Kaplan Publishing ... 40,000 125,000 55,000 The fair value of the net assets of the subsidiary at the date of acquisition was $65,000 The increase in the fair value is attributable to a fair value adjustment in respect... Introducing fair values Question Sea lion The following information relates to an 80% subsidiary which is a cash-generating unit It is group policy to measure the NCI at acquisition at fair value...www.kaplanpublishing.co.uk Section Introducing fair values Question Seal Two years ago a parent company paid $90,000 for an investment of 80% of