If one company is consolidating its balance sheet with another company using the acquisition method, how does a full goodwill calculation always result in a higher shareholder’s equity than a partial goodwill calculation?
The only difference in the full goodwill method vs the partial goodwill method comes in non-controlling interest and goodwill (the actual equity “belonging” to the previous shareholders of the firm stays the same).
Under the full goodwill method you compute your goodwillfull = (purchase price / percentage bought) - fair value of targets net assets = value of target - fair value of targets net assets. Under the partial goodwill method you compute your goodwillpartial = purchase price - percentage bought * fair value of target net assets = value of the part of target that was bought - fair value of net assets of the bought part of target = percentage bought * (value of target - fair value of target net assets)
So you find that goodwillfull >= goodwillpartial (and equal only if percentage bought = 100%). The liability item that will be higher in a full goodwill calculation is non-controlling interest (assets and liabilities must balance). Non-controlling interest is part of shareholder equity and thus shareholder equity for a full goodwill calculation is always bigger than shareholder equity of a partial goodwill calculation (or equal to it in case of a 100% deal).