dec 07 dfs paper goodwill anyone help?

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ema192
ema192 Registered Posts: 107 Dedicated contributor 🦉
I am having trouble understanding this goodwill workings on the paper for consoldated balance sheet. It seems different to any other i have done,
so far i got
cost 26000

Retained earnings 12052
Share Capital 12000
Share Premium4000
Revaluation 3000
Post acquisition 5040

36092 75% of group share 27069

goodwill 27069-cost 26000= 1069

but the answers state goodwill 2711

in confused now cause i thought id finally figured this out and now another hurdle appears arrggghhhhhh, anyone help if they are doing the same paper??
Thanks

Emma

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  • Sally
    Sally Registered Posts: 69 Regular contributor ⭐
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    Ive done this one - the 75% attributable to the parent at acquisition does not include post acquisition retained earnings (3780) .. so goodwill = consideration/cost £26,000 - £23,289 = £2711

    Hope that helps - i can do them but please dont ask me to explain!!!
  • Cyfarthfa
    Cyfarthfa Registered Posts: 62 Regular contributor ⭐
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    Hi Emma,

    I think what you have done is included the post acquisition retained earnings. For goodwill you do the shares, retained earnings and revaluation at acquisition date.

    Therefore: 12,000 + 4,000 + 12,053 + £3,000 = 31, 052

    Work out 75% of this = £23,289.

    Then cost £26,000 - £23,289 = £2,711.

    The post aquisition retained earnings figure is used when calculating the consolidated retained earnings figure and not goodwill.

    Hope this helps
  • ema192
    ema192 Registered Posts: 107 Dedicated contributor 🦉
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    Hiya
    Thankyou i understand now looking through my notes didnt seem to help at all, but your explanations helped!!
    I think theres only so much my brain can take in a day!

    emma :-)
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