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    Hey there

    So I'm going through some exams papers as revision, doing group accounts with both a subsidiary and an associate. In my current one, I'm not given the FV of NCI of the subsidiary, even though I'm specifically told to use the fair value method for calculating goodwill, so PNA method is out of the window. I'm given the market value of shares of the subsidiary to calculate fair value, but I've no idea how, any help?
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    (Original post by VinnicombeDmv)
    Hey there

    So I'm going through some exams papers as revision, doing group accounts with both a subsidiary and an associate. In my current one, I'm not given the FV of NCI of the subsidiary, even though I'm specifically told to use the fair value method for calculating goodwill, so PNA method is out of the window. I'm given the market value of shares of the subsidiary to calculate fair value, but I've no idea how, any help?
    Fair value is the amount at which a buyer would be willing to buy and a seller would be willing to sell at the given date. In this case you would use the market value as a proxy for fair value. I spent most of yesterday auditing the marketable securities held by one of my clients and for traded equities that they held it was correct to use the market value as a proxy for fair value.
 
 
 
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Updated: January 13, 2017
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