The following information was extracted from the financial reports of the three companies for the year ended 31 December 2019:

Purple Group's accounting policy states that non-controlling interests are measured as a proportion of net identifiable assets as at acquisition date. 

Required: 

Briefly discuss the difference in accounting treatment of positive goodwill arising from the purchase of a subsidiary versus an associate, from a consolidation point of view.

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Green Almond Purple ($) 890,000 1,234,000 (S) 200,000 920,000 ($) 300,000 420,000 Share capital Retained profits as at 1 January 2019 Profit after tax for 2019 45,000 72,000 20,000 59,000 Dividends paid in 2019 Green Almond Purple ($) 890,000 1,234,000 (S) 200,000 920,000 ($) 300,000 420,000 Share capital Retained profits as at 1 January 2019 Profit after tax for 2019 45,000 72,000 20,000 59,000 Dividends paid in 2019

Answer rating: 100% (QA)

In case of Positive goodwill arising from the purchase of subsidi... View the full answer