Canal+France, a subsidiary of Vivendi, acquired 85 percent of TPS Cinema in January 2007 for 787 millionfair

Question:

Canal+France, a subsidiary of Vivendi, acquired 85 percent of TPS Cinema in January 2007 for ‚¬787 millionfair value of Canal+France shares. Information on the acquisition is as follows (in millions):

Required
a. Calculate total goodwill and the reported amount of noncontrolling interests at the date of acquisition, assuming Vivendi uses the IFRS alternative valuation method for noncontrolling interests.
b. Prepare the consolidation eliminating entries at the date of acquisition.
c. Prepare the consolidation eliminating entries at December 31,2007, assuming the following information for 2007 (in millions):
i. TPS reports new income of ‚¬80 and pays no dividends.
ii. The customer lists have a five-year life, straight-line; the TPS trade name has an indefinite life, and impairment is ‚¬5; goodwill impairment is ‚¬100.
iii. There are no write-offs of assumed liabilities, fair value adjustments, or deferred tax assets,
iv. Vivendi uses the complete equity method to report its investment in TPS on its own books.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...