Consolidated statements of financial position - Calculating Goodwill

philreddy1985

Hello :-)

I am wondering if someone will be able to assist me with calculating goodwill.

Consideration
NCI at acquisition
Net assets acquired
= Goodwill

In the practice question I am currently stuck on,I can calculate the Consideration and the NCI at acquisition but I am completely lost when attempting to calculate the Net assets acquired value.

Is there an easy formula for calculating this figure?

Am i right in assuming that Net Assets = Assets-Liabilities?

Any asistance or pointers would be great.

CSan89

Net assets = Total assets less total liabilities. Another way is to use the Equity figure.
It might be that you have some revaluation of assets that need to be factored into the calculation.

DannyT90

The net assets acquired is the share capital and retained earnings on the subsidiary at the start of the acquisition added together. So the figures you use to work out the NCI, just add them together.

If a revaluation is included in the question, then this needs to be added to the retained earnings at acquisition.

Hope this helps.