Skip to content
Felix
  • Topics
    • My List
    • Felix Guide
    • Asset Management
    • Coding and Data Analysis
      • Data Analysis and Visualization
      • Financial Data Tools
      • Python
      • SQL
    • Credit
      • Credit Analysis
      • Restructuring
    • Financial Literacy Essentials
      • Financial Data Tools
      • Financial Math
      • Foundations of Accounting
    • Industry Specific
      • Banks
      • Chemicals
      • Consumer
      • ESG
      • Insurance
      • Oil and Gas
      • Pharmaceuticals
      • Project Finance
      • Real Estate
      • Renewable Energy
      • Technology
      • Telecoms
    • Introductory Courses
    • Investment Banking
      • Accounting
      • Financial Modeling
      • M&A and Divestitures
      • Private Debt
      • Private Equity
      • Valuation
      • Venture Capital
    • Markets
      • Economics
      • Equity Markets and Derivatives
      • Fixed Income and Derivatives
      • Introduction to Markets
      • Options and Structured Products
      • Other Capital Markets
      • Securities Services
    • Microsoft Office
      • Excel
      • PowerPoint
      • Word & Outlook
    • Professional Skills
      • Career Development
      • Expert Interviews
      • Interview Skills
    • Risk Management
    • Transaction Banking
    • Felix Live
  • Pathways
    • Investment Banking
    • Asset Management
    • Equity Research
    • Sales and Trading
    • Commercial Banking
    • Engineering
    • Operations
    • Private Equity
    • Credit Analysis
    • Restructuring
    • Venture Capital
    • CFA Institute
  • Certified Courses
  • Ask An Instructor
  • Support
  • Log in
  • Topics
    • My List
    • Felix Guide
    • Asset Management
    • Coding and Data Analysis
      • Data Analysis and Visualization
      • Financial Data Tools
      • Python
      • SQL
    • Credit
      • Credit Analysis
      • Restructuring
    • Financial Literacy Essentials
      • Financial Data Tools
      • Financial Math
      • Foundations of Accounting
    • Industry Specific
      • Banks
      • Chemicals
      • Consumer
      • ESG
      • Insurance
      • Oil and Gas
      • Pharmaceuticals
      • Project Finance
      • Real Estate
      • Renewable Energy
      • Technology
      • Telecoms
    • Introductory Courses
    • Investment Banking
      • Accounting
      • Financial Modeling
      • M&A and Divestitures
      • Private Debt
      • Private Equity
      • Valuation
      • Venture Capital
    • Markets
      • Economics
      • Equity Markets and Derivatives
      • Fixed Income and Derivatives
      • Introduction to Markets
      • Options and Structured Products
      • Other Capital Markets
      • Securities Services
    • Microsoft Office
      • Excel
      • PowerPoint
      • Word & Outlook
    • Professional Skills
      • Career Development
      • Expert Interviews
      • Interview Skills
    • Risk Management
    • Transaction Banking
    • Felix Live
  • Pathways
    • Investment Banking
    • Asset Management
    • Equity Research
    • Sales and Trading
    • Commercial Banking
    • Engineering
    • Operations
    • Private Equity
    • Credit Analysis
    • Restructuring
    • Venture Capital
    • CFA Institute
  • Certified Courses
Felix
  • Data
    • Company Analytics
    • My Filing Annotations
    • Market & Industry Data
    • United States
    • Relative Valuation
    • Discount Rate
    • Building Forecasts
    • Capital Structure Analysis
    • Europe
    • Relative Valuation
    • Discount Rate
    • Building Forecasts
    • Capital Structure Analysis
  • Models
  • Account
    • Edit my profile
    • My List
    • Restart Homepage Tour
    • Restart Company Analytics Tour
    • Restart Filings Tour
  • Log in
  • Ask An Instructor
    • Email Our Experts
    • Felix User Guide
    • Contact Support

Introduction to Full Consolidation

Understand how majority investments are accounted for.

Unlock Your Certificate   
 
0% Complete

22 Lessons (67m)

Show lesson playlist
  • Description & Objectives

  • 1. M&A Accounting Overview

    01:35
  • 2. Balance Sheet Consolidation

    03:06
  • 3. Balance Sheet Consolidation Workout

    02:53
  • 4. Sources and Uses of Funds - Consolidation

    01:03
  • 5. Goodwill Calculation

    02:22
  • 6. Goodwill Workout

    02:02
  • 7. BS Consol, Sources Uses, GW Workout 1

    03:53
  • 8. Deal Goodwill and Asset Revaluation Workout

    02:05
  • 9. Deal Goodwill and Consolidated Goodwill Workout

    03:45
  • 10. IS Consolidation

    01:13
  • 11. IS Consolidation Workout

    03:13
  • 12. IS Consol With Mid Year Deal Date Workout

    02:04
  • 13. Spotting a Mid Year Deal in Multiples Workout

    02:07
  • 14. IS Consol With Stub Period Workout

    04:23
  • 15. NCI Value Over Time

    02:22
  • 16. NCI Value Over Time Workout

    01:51
  • 17. BS Consol and NCI - 2 Methods for Goodwill Calculation

    03:14
  • 18. BS Consol and NCI - FV of Net Assets Method Workout

    05:23
  • 19. BS Consol and NCI - Fair Value of NCI Method Workout

    04:44
  • 20. BS Consol and NCI - Methods Compared Workout

    09:54
  • 21. IS Consol and NCI Workout

    04:39
  • 22. Intro to Full Consolidation Tryout


Prev: Equity Method Investments Next: Finding Key Financial Figures

BS Consol and NCI - Fair Value of NCI Method Workout

  • Notes
  • Questions
  • Transcript
  • 04:44

Calculate Goodwill using the Fair Value of NCI method

Downloads

BS Consolidation and NCI - Fair Value of NCI Method Workout EmptyBS Consolidation and NCI - Fair Value of NCI Method Workout Full

Glossary

Fair Value of NCI Identifiable Net Assets
Back to top
Financial Edge Training

© Financial Edge Training 2025

Topics
Introduction to Finance Accounting Financial Modeling Valuation M&A and Divestitures Private Equity
Venture Capital Project Finance Credit Analysis Transaction Banking Restructuring Capital Markets
Asset Management Risk Management Economics Data Science and System
Request New Content
System Account User Guide Privacy Policy Terms & Conditions Log in
Transcript

In this workout the Florence Inc. is buying 80% of the equity capital of Rome Ltd We need to put lots of information into this calculation We need to do a sources and uses of funds immediately underneath We need to do a goodwill calculation and then we need to consolidate the two sets of accounts together We might notice that it asks us to use the fair value method for non-controlling interests So let's start by calculating the sources and uses of funds Our first one is the purchase of equity in Rome Ltd. From the question we spent 3,355 on that I now ask, where did I get the funds for that? The first one is balance sheet cash, that 55 million. The next one was an equity issuance of 825 million And the remainder was a debt issuance, so let's work out the remainder It's the purchase price minus the funds you've already found, giving us 2,475 And now I check my sources of funds equal 3,355 and my use of funds 3,355 as well Next we move onto the calculation of goodwill Now at the top of the question, it said the fair value of the remaining 20% stake is considered to be 675 Because we're given the fair value and because we're asked to use the fair value method for non-controlling interests we'll have to include that in the goodwill calculation So goodwill calculation will be in three parts, firstly we'll find the goodwill on the acquirer stak We'll then calculate the goodwill on the NCI stake and then we'll put those two bits together to find the final deal goodwill So let's start with the goodwill on the acquirer stake This starts with the purchase price and that was given to us on our sources and uses of 3,355 Next up, I need to work out how much that is above the value of net assets of shareholders' equity So I go down to Rome's equity and it's 1,773.2 However we only purchased 80% of that, so I'm going to hard code an 80% into that formula (wouldn't normally do that) And then times that by minus 1. Fantastic! I can now work out the goodwill on the acquirer stake being 1,936.4 But we've also got goodwill on the NCI stake For this I start with the fair value of NCI, that was given to us of 675 I now need to work out how much higher that is than the book value of NCI For that, I need to take shareholders' equity (or net assets) on the balance sheet and I only take 20% of it So my total equity of Rome is 1,773.2, I times that by 20% and times that by minus 1 So the goodwill on the NCI stake is the sum of the two items above 320.4 Lastly then, my final deal goodwill is the sum of the goodwill on the NCI stake and the goodwill on the acquirer stake of 1936.4 And it comes to 2,256.8 We now need to put that and everything else into our consolidation The first thing we need to do is take Rome's equity and get rid of it. We've bought those shares and ripped them up So I take Rome's equity, times it by minus 1 And now when we go through to the consolidation on the right hand side, those two figures will cancel each other out Next up is the financing, we used some cash to buy this company, 55 You can also see we used some equity issuance and debt issuance, so let's put those two in as well Firstly long-term debt, that's gone up by 2,475 and there's been an equity issuance as well The last one is the extra goodwill and the NCI that's been created The goodwill is the deal goodwill just above of 2,256.8 And we also created an NCI The NCI given to us in the question, it's fair value was 675 So I now check down from my combo column (my consolidated set of accounts) I've got 21,377 of assets and I've got 21,377 of liabilities and equity

Content Requests and Questions

You are trying to access premium learning content.

Discover our full catalogue and purchase a course Access all courses with our premium plans or log in to your account
Help

You need an account to contact support.

Create a free account or log in to an existing one

Sorry, you don't have access to that yet!

You are trying to access premium learning content.

Discover our full catalogue and purchase a course Access all courses with our premium plans or log in to your account

You have reached the limit of annotations (10) under our premium subscription. Upgrade to unlock unlimited annotations.

Find out more about our premium plan

You are trying to access content that requires a free account. Sign up or login in seconds!

Create a free account or log in to an existing one

You are trying to access content that requires a premium plan.

Find out more about our premium plan or log in to your account

Only US listed companies are available under our Free and Boost plans. Upgrade to Pro to access over 7,000 global companies across the US, UK, Canada, France, Italy, Germany, Hong Kong and more.

Find out more about our premium plan or log in to your account

A pro account is required for the Excel Add In

Find out more about our premium plan

Congratulations on completing

This field is hidden when viewing the form
Name(Required)
This field is hidden when viewing the form
Rate this course out of 5, where 5 is excellent and 1 is terrible.
Were the stated learning objectives met?(Required)
Were the stated prerequisite requirements appropriate and sufficient?(Required)
Were the program materials, including the qualified assessment, relevant and did they contribute to the achievement of the learning objectives?(Required)
Was the time allotted to the learning activity appropriate?(Required)
Are you happy for us to use your feedback and details in future marketing?(Required)

Thank you for already submitting feedback for this course.

CPE

What is CPE?

CPE stands for Continuing Professional Education, by completing learning activities you earn CPE credits to retain your professional credentials. CPE is required for Certified Public Accountants (CPAs). Financial Edge Training is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors.

What are CPE credits?

For self study programs, 1 CPE credit is awarded for every 50 minutes of elearning content, this includes videos, workouts, tryouts, and exams.

CPE Exams

You must complete the CPE exam within 1 year of accessing a related playlist or course to earn CPE credits. To see how long you have left to complete a CPE exam, hover over the locked CPE credits button.

What if I'm not collecting CPE credits?

CPE exams do not count towards your FE certification. You do not need to complete the CPE exam if you are not collecting CPE credits, but you might find it useful for your own revision.


Further Help
  • Felix How to Guide walks you through the key functions and tools of the learning platform.
  • Playlists & Tryouts: Playlists are a collection of videos that teach you a specific skill and are tested with a tryout at the end. A tryout is a quiz that tests your knowledge and understanding of what you have just learned.
  • Exam: If you are collecting CPE points you must pass the relevant CPE exam within 1 year to receive credits.
  • Glossary: A glossary can be found below each video and provides definitions and explanations for terms and concepts. They are organized alphabetically to make it easy for you to find the term you need.
  • Search function: Use the Felix search function on the homepage to find content related to what you want to learn. Find related video content, lessons, and questions people have asked on the topic.
  • Closed Captions & Transcript: Closed captions and transcripts are available on videos. The video transcript can be found next to the closed captions in the video player. The transcript feature allows you to read the transcript of the video and search for key terms within the transcript.
  • Questions: If you have questions about the course content, you will find a section called Ask a Question underneath each video where you can submit questions to our expert instructor team.