Consolidation Question

CFA Level II FRA
#1

Hi everyone,

As I understand total equity is greatest under full goodwill > partial goodwill > equity method.

But there are likely contradictions in the solution to reading 17 (CFAI Cirriculum)

Question 5: States total equity is greatest under full goodwill > partial goodwill > equity method.

Question 29: Under either of the consolidations, beginning equity is £1,750 (implying equity is the same under both partial and full goodwill)

Any thoughts?

#2

There is no goodwill in Q 29 - the excess of the purchase price over book value is attributable to identifiable assets. So partial and full goodwill methods result in the same equity.

#3

Thanks Gebura :smiley: Got it