Assume the same facts as in P4.9, except that P Co measures non-controlling interests as a proportion

Question:

Assume the same facts as in P4.9, except that P Co measures non-controlling interests as a proportion of identifiable net assets. Assume that the ordinary shares and stock options share proportionately in the fair value of identifiable net assets.


Required:
1. Determine the amount of non-controlling interests that has to be recognized by P Co as at acquisition date.
2. Determine the amount of goodwill that has to be recognized by P Co as at acquisition date.

Data from P4.9

P Co acquired control of Sapphire Co on 1 July 20x8 by acquiring 90% of the ordinary shares and stock options of Sapphire Co through paying cash of $200,000,000 to the former owners of Sapphire Co. P Co measures noncontrolling interests at fair value. Tax on fair value of identifiable net assets should be recognized at 20%. The information on identifiable net assets of Sapphire Co is shown below:

image text in transcribed

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: