On 1 January 2020, Jacobs company acquired 90% of Gamma company’s share capital for a total value of £500m. Additional information: The fair value of the subsidiary’s net assets on acquisition total £400 million. Assuming the fair value of the non-controlling interest (NCI) share at acquisition was £50 million. Calculate the NCI and goodwill of the group on 1 January 2020 using the following two NCI methods: 1. Traditional method: NCI’s proportionate share of net assets of the acquiree. 2. Full (gross) goodwill method.
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On 1 January 2020, Jacobs company acquired 90% of Gamma company’s share capital for a total value of £500m. Additional information:
The fair value of the subsidiary’s net assets on acquisition total £400 million.
Assuming the fair value of the non-controlling interest (NCI) share at acquisition was £50 million.
Calculate the NCI and
1. Traditional method: NCI’s proportionate share of net assets of the acquiree.
2. Full (gross) goodwill method.
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