BUSINESS COMBINATION (IFRS-3)

Workings:
W1-Group Structure:
Parent company
Parent share=%

Associate company
Subsidiary company
NCI share=%

W2- Net assets of subsidiary company:

At acquisition date At reporting date

$ $

Share capital √ √
Share premium √ √
Revaluation reserve √ √
General reserve √ √
Retain earnings √(pre) √(pre+post)
Fair value adjustment:
Fair value √/(√) √/(√)
Revaluation √/(√)

Excess/Reduced depreciation on FV (√)/√

Provision for unrealise profit(PUP) (√ )
√ √

W3-Goodwill calculation :-Full basis

 $
Cost of investment/Fair value of consideration
Cash √
Share √
Loan note √
Deferred consideration (P.V) √
Contingent consideration (P.V) √
√

Fair value of NCI √

(-)FV of net assets of subsidiary at acquisition (√)

Full Goodwill at acquisition √

W4- Non controlling interest(NCI):Fair value basis

$
Fair value of NCI √

Add: post acquisition profit × NCIshare (%) √

√
Add: post acquisition reserve× NCIshare (%) √
Less: Goodwill impairment× NCIshare (%) (√)
√

W5- Group retainearning:

 $
Parent √/(√)
(+)/(-)Subsidiary’s post acquisition profit √/(√)
(net assets reporting date – net assets acquisition date)W2× parent share (%)

(+)/(-) Associate’s post acquisition profit× Holding share (%) √/(√)

(+/-) Unrecorded income/expensesofParent √/(√)

(+) Negative goodwill √/(√)
(+/-) Change in liabilities & assets ofParent √/(√)

(-) Acquisition expenses (Transaction cost) (√)

(-) Unwinding discount (√)
(-) Goodwill impairment× Holing share (%) (√)
(-) Associate company impairment ( √)

(-)PUP (If, H sales to S) (√)

(-)PUP (If sales, H to A or A to H )× % (√)
√/(√)

NOTE:any unrecorded or unadjusted

income/expenses of Holding CO should be adjust
with group retainearning.
W6-Group reserve:
$
Parent √
(+) Subsidiary post reserve × parent share (%) √

W7-Associate company:
$
Investment at cost √
(+)/(-) Associate’s post acquisition profit× parent share (%) √/(√)

√
(-) PUP (If, H sales to S) (√)
√

(-) Impairment (√)

Carrying value of associate company √