Extracts from the financial statements of QA and LM for the year ended 31 March 20X4 are

Question:

Extracts from the financial statements of QA and LM for the year ended 31 March 20X4 are presented below.

Summarized statement of profit or loss and statement of other comprehensive income for the year ended 31 March 20X4

Additional information:

. QA acquired 35 per cent of the equity share capital of LM for $255 million in 20X1 when the net assets of LM were $670 million. QA was able to exercise significant influence over LM by virtue of this investment. On 1 January 20X4, QA acquired a further 40 per cent of the equity share capital of LM, giving QA control. The consideration paid was $320 million and the net assets of LM had a fair value of $710 million on 1 January 20X4. On 1 January 20X4, the initial 35 per cent investment in LM had a fair value of $280 million.

• Assume that profits gains and losses accrue evenly throughout the year. 

• Non-controlling interest had a fair value of $180 million on 1 January 20X4.

• LM has not issued any share capital since 20X0.


Required: 

Calculate the goodwill arising on the acquisition of LM.

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Related Book For  book-img-for-question

International Financial Reporting And Analysis

ISBN: 9781473766853

8th Edition

Authors: David Alexander, Ann Jorissen, Martin Hoogendoorn

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