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A company issues new stock with a fair value of $120,000 to acquire 85% of the stock of another company. The fair value of the noncontrolling interest at the date of acquisition is $19,000, and the book value of the acquired company is $15,000. The subsidiary's net assets are reported at amounts approximating fair value at the date of acquisition, except that its plant assets are overvalued by $25,000, its reported license agreements are undervalued by $30,000, and it has previously unreported identifiable intangible assets with a fair value of $50,000.
-At what amount is the noncontrolling interest valued at the date of acquisition, following the alternative method allowed by IFRS?

Question

Use the following information to answer bellow Questions 
A company issues new stock with a fair value of $120,000 to acquire 85% of the stock of another company. The fair value of the noncontrolling interest at the date of acquisition is $19,000, and the book value of the acquired company is $15,000. The subsidiary's net assets are reported at amounts approximating fair value at the date of acquisition, except that its plant assets are overvalued by $25,000, its reported license agreements are undervalued by $30,000, and it has previously unreported identifiable intangible assets with a fair value of $50,000.
-At what amount is the noncontrolling interest valued at the date of acquisition, following the alternative method allowed by IFRS?

Quizplus · Accepted Answer

15% x $70,000 = $10,500

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