Question 1

Section B - Case 3: BioHealth Holdings

BioHealth Holdings acquired 75% of the equity share capital of MedTech Co on 1 January 20X8 for $8,500,000. At the acquisition date, the fair value of MedTech's net assets was $9,200,000. BioHealth values the non-controlling interest (NCI) at fair value, which was $2,600,000 at the acquisition date. For the year ended 31 December 20X8, MedTech reported a profit after tax of $1,200,000. No dividends were paid.

What is the carrying amount of the Non-Controlling Interest (NCI) in the consolidated statement of financial position as at 31 December 20X8?

Accepted Answer

Take the NCI at acquisition and add the NCI's share (25%) of the subsidiary's post-acquisition profit.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Calculating NCI using the proportionate share of net assets method when the question states fair value method is used.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FR — Financial Reporting Practice Exam 6

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