Question 1 - Part b

In this lesson

1. 0:00 Calculating goodwill on acquisition
2. 1:01 Identifying consideration paid and NCI value
3. 2:23 Determining fair value of net assets
4. 3:02 Removing subsidiary from consolidation
5. 5:08 Adjusting bond valuation to present value
6. 9:31 Finalising consolidated statement position

About this lesson

adjustments. You'll learn how to build the goodwill calculation step by step: combining the consideration paid (cash and bonds) with the non-controlling interest value, then deducting the fair value of net assets acquired. The worked example shows how to handle a common complication—bonds recorded at nominal value rather than present value—and demonstrates why it's essential to identify and correct fair value measurement errors before finalising your consolidation figures. A key learning point here is the importance of working systematically through consolidation adjustments. By handling the goodwill calculation, subsidiary removal, and fair value corrections together in your spreadsheet, you'll maintain consistency across your answer and avoid missing adjustments that could affect multiple figures in the consolidated statement of financial position.

Duration: 11m