What is the 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? Pencil Company purchases 80% of the outstanding shares of Eraser Companyfor P9,000,000. The carrying value of Subsidiary Company's net assets at thetime of acquisition was P6,000,000 and had a fair value of P8,000,000.

Actual cost of acquisition = Cost of acquistion - Control premium= P6,000,000 -P400,000=P5,600,000…

Pencil Company purchases 80% of the outstanding shares of Eraser 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.

Pencil Company purchases 80% of the outstanding shares of Eraser 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.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 44P

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

What is the 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?

Pencil Company purchases 80% of the outstanding shares of Eraser 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.

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

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