Week 8 - Piecmeal acquisitions, joint arrangements and disclosures

Question 1

Investment to subsidiary piecemeal: How to calculate goodwill?

Answer 1

Consideration = consideration paid for additional % + Fair value of previously held investment

Question 2

Associate to subsidiary piecemeal acquisition: What to do when control is achieved?

Answer 2

Remeasure investment in associate to fair value
* Essentially treat as if associate ‘sold’ and a subsidiary purchased
* Gain/loss to profit or loss (not OCI)