ACC204 Corporate Accounting and Reporting: Goodwill Analysis

This report provides a detailed analysis of corporate accounting and reporting, specifically focusing on the ACC204 course. The assignment includes an acquisition analysis, valuation entries for business combinations, and journal entries for recognizing Non-Controlling Interest (NCI). The report al...Read More

Running head: ACC204 CORPORATE ACCOUNTING AND REPORTING
ACC204 Corporate Accounting and Reporting
Name of the Student:
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1ACC204 CORPORATE ACCOUNTING AND REPORTING
Table of Contents
1. Acquisition Analysis of the organisation:..............................................................................2
2. Business Combination Valuation Entries (BCVR) at acquisition:........................................2
3. Journal entry to recognise NCI:.............................................................................................3
4. Consolidated worksheet entries at 30 June 2020:..................................................................3
5. Explaining the step by providing the full goodwill method:..................................................4
Reference:..................................................................................................................................5

2ACC204 CORPORATE ACCOUNTING AND REPORTING
1. Acquisition Analysis of the organisation:
Acquisition Analysis at July 2019
Particulars Value
Inventories 2,29,600
Land 4,59,200
Vehicle 5,35,500
Fittings 315
Liabilities (Contingent) 35,000
Share capital 9,56,000
General reserve 4,10,000
Asset revaluation surplus 3,28,000
Net fair value 29,53,615
Consideration transferred @
91% 27,32,000
NCI @ 9% 2,70,198
Goodwill on acquisition 48,583
2. Business Combination Valuation Entries (BCVR) at acquisition:

3ACC204 CORPORATE ACCOUNTING AND REPORTING
3. Journal entry to recognise NCI:
4. Consolidated worksheet entries at 30 June 2020:

4ACC204 CORPORATE ACCOUNTING AND REPORTING
5. Explaining the step by providing the full goodwill method:
The consolidation method has two different types of goodwill valuation technique,
which is mainly used to determine the actual goodwill amount is being paid by the acquirer.
The partial goodwill method has been used in the overall assessment, which mainly helps in
determining the actual goodwill that is being paid by Ethan Ltd for acquiring Davis Ltd. The
partial method mainly aims to determine the goodwill of the firm, which has been calculated
to be at the levels of 48,583. The calculations of the partial method are not included in the
valuation for NCI, whereas the full goodwill method accommodates the requirement of NCI
in the calculations. Therefore, from the analysis, it is detected that the calculation of goodwill
for Ethan Ltd would change if the method is altered from partial to full goodwill technique.
Robinson (2020) mentioned that with the help of goodwill calculation method companies are
mainly able to determine the level of extra payment that is being conducted to acquire
different organisations, while preparing their consolidated balance sheet.

5ACC204 CORPORATE ACCOUNTING AND REPORTING
Reference:
Robinson, T.R., 2020. International financial statement analysis. John Wiley & Sons.