Help Needed - FSLC - Consolidated Statement of Financial Position
VickyR89
Registered Posts: 2 New contributor 🐸
Can anyone help me figure out the below please as my answer is not matching with the actual answer, I cant work out where I am going wrong
1 - On 1 Jan 20X1 Texas Plc acquired 80% of the issued share capital and voting rights of Houston Ltd for £420,000. At that date Houston Ltd had issued share capital of £240,000 and retained earnings of £20,000. The fair value of the non current assets of Houston Ltd on that date was £100,000 more than the carrying amount. This revaluation has not been recorded in the books. (ignore any effect on the depreciation for the year)
2 - The directors of Texas Plc have concluded that goodwill arising on the acquisition of Houston Ltd has been impaired by £25,000 during the year.
3 - Included in the trade receivables of Texas plc and in the trade payables of Houston Ltd at 31 Dec 20X1 is an inter-company balance of £6000.
4 - Texas plc has decided non controlling interests will be valued at their proportionate share of net assets.
I'm struggling to work out goodwill and have got the following:
Consideration - £420
NCI at acquisition - £72
Net Assets Acquired -
Impairment of goodwill = -£25
The answer to net assets acquired is showing as -360, the only thing I can see that may be relevant is the retained earnings of Houston Ltd in the sofp are 60.
1 - On 1 Jan 20X1 Texas Plc acquired 80% of the issued share capital and voting rights of Houston Ltd for £420,000. At that date Houston Ltd had issued share capital of £240,000 and retained earnings of £20,000. The fair value of the non current assets of Houston Ltd on that date was £100,000 more than the carrying amount. This revaluation has not been recorded in the books. (ignore any effect on the depreciation for the year)
2 - The directors of Texas Plc have concluded that goodwill arising on the acquisition of Houston Ltd has been impaired by £25,000 during the year.
3 - Included in the trade receivables of Texas plc and in the trade payables of Houston Ltd at 31 Dec 20X1 is an inter-company balance of £6000.
4 - Texas plc has decided non controlling interests will be valued at their proportionate share of net assets.
I'm struggling to work out goodwill and have got the following:
Consideration - £420
NCI at acquisition - £72
Net Assets Acquired -
Impairment of goodwill = -£25
The answer to net assets acquired is showing as -360, the only thing I can see that may be relevant is the retained earnings of Houston Ltd in the sofp are 60.
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Comments
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where is this question from?
I think Goodwill is 107
(420 investment - 288 - 25)
where 288 is share capital, revaluation and retained earnings x ownership 0.8; and 25 is the impairment.0 -
Hi Adele, thanks for your reply, the question came from one of the mock exams on the AAT website and they have -360 as retained earnings answer, I am baffled!0
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I'm guessing this must be on AQ2016 as I did PA1 earlier and just had a quick browse of PA2 and there is no mention of Texas (at least not in AQ2013)0
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Hi, have you figured out how to get Net Assets Acquired?
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