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CA Final · Integrated Business Solutions (Multidisciplinary Case Study with Strategic Management) · Financial Reporting

Case: Ananya Ltd. acquired 80% of Bhoomi Ltd. on 1 April 2024 for Rs 560 lakh. Bhoomi's identifiable net assets at fair value on that date were Rs 600 lakh. Ananya elects to measure non-controlling interest (NCI) at proportionate share of identifiable net assets. What is the goodwill on consolidation?

Goodwill is consideration of Rs 560 lakh plus NCI at its proportionate share of net assets, Rs 120 lakh, less fair value of net assets Rs 600 lakh, giving Rs 80 lakh. NCI must be included in the computation under the partial goodwill method.

  1. ARs 80 lakhCorrect
  2. BRs 20 lakh
  3. CRs 560 lakh
  4. DRs 140 lakh

Explanation

Goodwill = consideration 560 + NCI (20% of 600 = 120) - net assets 600 = Rs 80 lakh. Rs 80 lakh is correct; omitting NCI gives 560 - 600 = negative, and using only 80% of net assets (480) gives 80 as well but via a different route, so the NCI inclusion is the key step. Rs 20 lakh or Rs 140 lakh come from wrong NCI treatment.

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