Use the following information to answer Questions bellow
A parent acquired 90% of the voting stock of a subsidiary for $20,000. The fair value of the noncontrolling interest was $2,000. The subsidiary's book value at the date of acquisition was $1,000. Following is revaluation information for the subsidiary's identifiable net assets at the date of acquisition:
$$\begin{array} { | l | c | }
\hline & \text { Fair Value - Book Value } \
\hline \text { Inventories } & \$ \{ 400 \} \
\hline \text { Equipment } & \{ 10,000 \} \
\hline \text { Identifiable intangibles } & 16,000 \
\hline
\end{array}$$
-What is the amount of consolidated goodwill attributed to the noncontrolling interest at the date of acquisition, following U.S. GAAP?

Question

Use the following information to answer Questions bellow
A parent acquired 90% of the voting stock of a subsidiary for $20,000. The fair value of the noncontrolling interest was $2,000. The subsidiary's book value at the date of acquisition was $1,000. Following is revaluation information for the subsidiary's identifiable net assets at the date of acquisition:
 $$\begin{array} { | l | c | } 
\hline & \text { Fair Value - Book Value } \
\hline \text { Inventories } & \$ \{ 400 \} \
\hline \text { Equipment } & \{ 10,000 \} \
\hline \text { Identifiable intangibles } & 16,000 \
\hline
\end{array}$$
-What is the amount of consolidated goodwill attributed to the noncontrolling interest at the date of acquisition, following U.S. GAAP?

Quizplus · Accepted Answer

The amount of consolidated goodwill attributed to the noncontrolling interest is $1,340. This is calculated as follows:Consolidated goodwill = Fair value of noncontrolling interest - Book value of noncontrolling interestConsolidated goodwill = $2,000 - $1,000Consolidated goodwill = $1,000The consolidated goodwill is then allocated to the controlling and noncontrolling interests based on their respective ownership percentages. The controlling interest owns 90% of the subsidiary, so it is allocated 90% of the consolidated goodwill, or $900. The noncontrolling interest owns 10% of the subsidiary, so it is allocated 10% of the consolidated goodwill, or $100.

Use the Following Information to Answer Questions Bellow a Parent

Use the Following Information to Answer Questions Bellow
a Parent