Editing Consolidated financial statement (section)

=== Goodwill arising on consolidation ===

[[Goodwill (accounting)|Goodwill]] is treated as an intangible asset in the consolidated statement of financial position. It arises in cases where the cost of purchase of shares is not equal to their par value. For example, if a company buys shares of another company worth $40,000 for $60,000, there is a goodwill worth $20,000. 

Proforma for calculating goodwill is as follows:<ref>{{Cite book|title=Fia foundations of financial accounting ffa (acca f3).|author=BPP Learning Media|date=2016|publisher=BPP Learning Media|isbn=9781472745903|location=[Place of publication not identified]|oclc=951710877}}</ref>

'''''Goodwill'''''

Fair value of consideration transferred

Plus fair value of non-controlled interest at acquisition

Less ordinary share capital of subsidiary company

Less share premium of subsidiary company

Less retained earnings of subsidiary company at acquisition date

Less fair value adjustments at acquisition date