Price paid

Less: Book value of SHE of subsidiary

Excess of cost over value
Less: Adjustment to FV
GW/(Gain)

Partially owned subsidiary (Less than 100% stock ownership by parent company, above
50%)
Presence of Non-Controlling Interest (minority interest)
80% owned subsidiary
80% Parent
20% Non-controlling interest
PFRS 10: Parent is required to report NCI (Fair value)
NCI will be part of consolidated stockholders' equity

100% (Total) 80% (parent) 20% NCI

Price pd 12,500,000 10,000,000 2,500,000
FV of net - S (8,000,000) (6,400,000) (1,600,000)
Goodwill 4,500,000 3,600,000 900,000

Approaches in reported GW:

Fair value approach (Full GW method)
Both shares of parent and subs in GW will be reported in conso FS
Ex. GW P4,500,000

Proportionate approach (partial GW method)

Only parent's share in GW is reported (share of NCI excluded)
Ex. GW P3,600,000

Balances:
GW: P4,500,000 (Full GW)
P3,600,000 (Partial GW)
NCI:P2,500,000 (Full GW)
P1,600,000 (partial GW)
Treatment of GW impairment loss?
% GW parent : 3,600,000/4,500,000 = 80%
% GW NCI : 900,000/4,500,000 = 20%
Allocation: Parent 80% x 1M
NCI 20% x 1M

100% (Total) 60% (parent) 40% NCI

Price pd 10,300,000 6,300,000 4,000,000
FV of net - S (7,000,000) (4,200,000) (2,800,000)
GW 3,300,000 2,100,000 1,200,000
GW (Full GW) 3,300,000
GW (partial) 2,100,000
NCI (Full) 4,000,000
NCI (partial) 2,800,000
GW % Parent: 2,100,000/3,300,000 = 64%
GW % NCI: 1,200,000/3,300,000 = 36%