In this workout, Aetna has bought 85% of the XI capital of Vesuvius PLC we're given the amount they spent, 27,500 we're given the book value of net assets of Vesuvius and the fair value of NCI we're asked to calculate Goodwill Because We've been given the fair value of NCI.

We'll need to check whether there is any goodwill arising from that.

So in order to calculate the goodwill, we'll firstly calculate the acquirer state goodwill.

We'll then calculate NCI Goodwill, and we'll then put the two of them together to come up with our total deal goodwill.

We've been told that the fair value of PPE is above book value and the same for intangibles.

It's also above book.

So let's start with our first Goodwill calculation.

We start with the equity acquisition price, that was 27,000.

Next up, we need to look at how much greater that is than the value of assets purchased.

So we start with the net assets on the balance sheet, all 100% of them.

If we look up back to the question, the question told us that this was 6,700.

However, We've also had a few step ups, PP E, first of all, and intangibles.

So we can now find that the net assets at fair value were 10,000 rather than the 6,700 on the books.

Now, the acquirer hasn't actually purchased all 100%. It's only purchased 85%.

So we'll find the value of that to be 8,500.

So the acquirer has spent 27,000 buying something that had fair value of 8,500.

That leads to Goodwill, and it's the difference between the two figures.

So that's our acquirer. State goodwill.

We now need to calculate the NCI goodwill as well.

We start with the NCI fair value, and this was 4,100.

We now need to work out if this is higher than the net assets at fair value.

Well, the net assets at fair value were 10,000, but only 15% of that is owned by the NCI.

We can see that the net assets at fair value for NCI were 1,500.

So the difference between the NCI fair value and the net assets at fair value gives us NCI Goodwill.

We can now calculate our deal goodwill.

Our deal goodwill is going to be the acquirer state goodwill of 18,500.

Add on the NCI Goodwill, and that gets us to our total goodwill of 21,100.

When putting this into the acquirer's consolidated balance sheet, we'd add in the 21,100 of deal goodwill, but we would also have to include the NCI at fair value of 4,100.