The Calculation of Goodwill and Non-Controlling Interest (NCI) Under the Entity

question 2

Multiple Choice

The calculation of Goodwill and non-controlling interest (NCI) under the Entity Theory is derived :

• A) by using an imputed acquisition cost, which would be the presumed cost of acquiring 100% of the outstanding voting shares of the subsidiary.
• B) by using the actual acquisition cost.
• C) by using the actual acquisition cost less any uncontrolled portion of the subsidiary's net assets at fair market value.
• D)by using the actual acquisition cost less any uncontrolled portion of the subsidiary's net assets at book value.

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Definitions:

Personal Liability

The legal responsibility of an individual to settle his or her debts and obligations, potentially using personal assets.

General Partner

A member of a partnership who has unlimited liability and is actively involved in the management of the partnership.

Business Management

The act of organizing, planning, leading, and controlling resources to achieve specific business objectives.

Venture Capitalism

The practice of investing in early-stage companies with strong growth potential in exchange for equity stakes.