Jabba Ltd acquired a 70 per cent interest in Han Ltd on 30 June 2012 for €2 000 000.On the same date,Han Ltd acquired a 60 per cent interest in Leia Ltd for a cash consideration of €1 600 000.The purchase price represents the fair value of consideration transferred for both investments.The share capital and retained earnings at the date of acquisition are as follows: $$\begin{array} { | l | r | r | }
\hline & \text { Han Ltd } & \text { Leia Ltd } \
\hline \text { Share capital } & 2000000 & 1600000 \
\hline \text { Retained earnings } & \underline { 600000 } & \underline { 800000 } \
\hline & \underline { 2600000 } & \underline { 2400000 } \
\hline
\end{array}$$ What is the non-controlling interest in Han Ltd and Leai Ltd,respectively on the date of acquisition using the partial goodwill method (round to the nearest dollar)?

Question

Jabba Ltd acquired a 70 per cent interest in Han Ltd on 30 June 2012 for €2 000 000.On the same date,Han Ltd acquired a 60 per cent interest in Leia Ltd for a cash consideration of €1 600 000.The purchase price represents the fair value of consideration transferred for both investments.The share capital and retained earnings at the date of acquisition are as follows: $$\begin{array} { | l | r | r | } 
\hline & \text { Han Ltd } & \text { Leia Ltd } \
\hline \text { Share capital } & 2000000 & 1600000 \
\hline \text { Retained earnings } & \underline { 600000 } & \underline { 800000 } \
\hline & \underline { 2600000 } & \underline { 2400000 } \
\hline
\end{array}$$ What is the non-controlling interest in Han Ltd and Leai Ltd,respectively on the date of acquisition using the partial goodwill method (round to the nearest dollar)?

Quizplus · Accepted Answer

The non-controlling interest (NCI) is calculated as the proportionate share of the net assets of the subsidiary. For Han Ltd, NCI is 30% of €2,600,000, which is €780,000. For Leia Ltd, NCI is 40% of €2,400,000, which is €960,000.

Jabba Ltd Acquired a 70 Per Cent Interest in Han