Hi
I am working on my first consolidation for a client.
In simple terms:
X acquired 90% of Y for £10m. NA @ Acquisition was £2m & profit between Acquisition and year end was £1m.
on Consolidation,
1)Remove £10m investment in sub,
2)Remove share capital and net assets of sub £2m
3) Insert goodwill - £8m (balancing figure between the two)
This balances. However, am I right in thinking that a goodwill calc you also need to add on NCI @ Acquisition (i.e. 10% x £2m)? This will lead to my balance sheet to not balance?
Replies (2)
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You have a minority interest of £200k (10% of £2m) and goodwill of £8.2m, assuming you don’t need to make any fair value adjustments to the acquisition balance sheet, e.g. to recognise other intangibles.