RMontgomery

Where you have increased your Assets by 125 (with 100 going to identifiable assets and 25 going to goodwill), you need to increase your E/L by the same amount to balance.

Owners equity will increase by 100 and NCI will increase by 20%* fair value of acquired assets which in this case were 125) = 25


Where 100$ buys 80% of the fair value,
125$ buys 100%

80/100 = 100/x solve for x=125

This 125 is not what the acquired firm will report on their B/S given it is usually lower (see line in exam 'but the fair value of the property held by X Co. was 25m above book value')

To account for this, we increase goodwill.

To account for a holding of <100% we have NCI which is the % unowned * FV of assets when acquired

20% * 100 is not correct because 100m is just the purchase price, not the full fair value of assets of acquired company.

Bit rambling but I hope that helps.