Consolidated statement of financial position - part 3
Taught by James Griffiths · AI tutor support included
In this lesson, you'll learn how to calculate goodwill, noncontrolling interest, and group reserves when a parent company acquires a controlling stake in a subsidiary. This is a crucial skill for consolidation questions in SBR and F2, where you'll typically work through a complete acquisition scenario step-by-step.
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In this lesson
- 0:00 Consolidation fundamentals and acquisition overview
- 2:01 Calculating goodwill on acquisition
- 4:20 Determining noncontrolling interest value
- 5:35 Working out group reserves
- 7:05 Full worked example: all three calculations
About this lesson
We work through a comprehensive example where company X acquires 90% of company Y, then calculate all three key elements. Goodwill is the difference between what you paid for the controlling interest plus the value of the noncontrolling interest, minus the subsidiary's net assets at acquisition. The noncontrolling interest at year-end combines its value at acquisition with its share of post-acquisition profits. Group reserves include 100% of the parent's reserves plus the parent's ownership percentage of the subsidiary's post-acquisition profits. By the end of this video, you'll understand how these three calculations work together in a consolidated statement of financial position, and you'll be able to apply the same methodology to similar exam questions. This builds directly on the IFRS 10 principles of control and the foundational consolidation concepts covered earlier in the chapter.
Duration: 8m
Transcript
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