How to Make a Consolidated Balance Sheet with Noncontrolling Interest

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I've spent hours today trying to do this assignment and stumbled upon this video two hours before it was due. Finished it in about 20 minutes. Bless your soul.

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Hey, I am preparing for FAR Foundation. Kindly help me if you can.

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Thank you, it's explained in very simple steps.

[@longdethKH]

Very neat explanation!

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[@JRR147]

Your videos are very helpful thank you a lot. But I do have a question concerning the calculation of goodwill. In my text book it says: purchase price - percentage of takeover (0.9) * fair value of assets of target = goodwill. Now I don’t know if I’m doing something wrong but I think your way yields a different amount for goodwill in this example am I right? Do you know why I have a different way of calculation here? Is that possible that there are different solutions? Thank you in advance :)

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[@Edspira]

Thank you!

[@waikitchan3639]

This is a good video. i would like to ask when the cash was paid to target company by Purchaser, should target company need to record the transaction as debit cash $3.06m and credit the share capital $3.06m? many thanks.

[@larco9028]

Can anyone please explain how the goodwill that gets debited, where does that show in the stockholders equity? I see we only count the parent's in addition to the NCI.

[@ahmedalswaity7914]

Thank you very much for video, really helped! I have a question though, what happens instead of taking the implied value we: take the (fair value of the net assets* 90%) and subtract the purchase price from the resulting number? would it lead to an erroneous NCI?

[@Edspira]

Ahmed, the way you suggested wouldn't work. If you plug in the numbers from this example, your method would yield an NCI of 360,000 instead of 340,000. I know there's a lot of steps to get to the NCI, but I think the method explained in the video is the easiest way to get there. Thanks for watching!

[@luvpinas123]

Hello! Aren't you supposed to take into account the tax effects in the FV adjustments before consolidating? Don't FV adjustments give rise to deferred tax balances and BCVR entries? Or is this requirement just applicable to IFRS consolidated financial statements? Because say, here in Australia where the corporate tax rate is at a flat 30%, a fair value readjustment to the company's assets would give rise to a deferred tax liability and an entry to the business combination valuation reserve. So for example, if the subsidiary's assets were undervalued by 100, the write-up in the consolidated balance sheet would be: Dr Asset 100 Cr DTL 30 Cr BCVR 70 Is this not required under GAAP? O:

[@Jutseful]

is consolidation method the same as acquistion method, from IFRS 3?

[@doubled613]

If I am making elimination entries for the year AFTER the acquisition, will the elimination entries be the same?

[@Edspira]

No, the journal entries change depending on the activity during the year.

[@kathyho3985]

Why do we have to eliminate the target's equity accounts? Please advise.

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Thank you very much

[@candidacain2513]

Do you have a video on eliminating intersegment sale or intersegment sales of equipment?

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I currently don't have a video on this, but I'll add it to my list of requested videos which I intend to tackle this summer. Thanks for watching!

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Thank you!

[@justinschmidt2471]

Is this full or partial goodwill?

[@Luke-nh5tu]

sorry, but can you explain how did you get a fair value of Target's net fixed assets = 2,625,000

[@gb9348]

yeah that number just magically appears. i can't understand where that number comes from, i need more of an explanation.

[@nthwndroregano6604]

@@gb9348 There is no logic behind it, nor do you need to know. He is just trying to demonstrate how you would go about adjusting to Fair Value.

[@edibledragon81]

i thought non controlling interest was 50% or less and doesn't control the board

[@edibledragon81]

after watching the video further i now think he is talking about the other shareholders