NCI – Non-Controlling Interest

In the income statement:
NCI = netproft of subsidiary x %ge ownership of NCI
NB the netprofit figure is after adjustments such as unrealised profit in the books of subsidiary for goods in parent’s inventory

In statement of Financial Position
NCI = net assets of subsidiary x %ge ownership of NCI

NB The net assets figure is after any necessary adjustment

Regards,

Yes thats right.

Do you recognise ACCA’s treatment of unrealised profit in Non currents assets sold by parent to subsidiary. This unrealised profit is adjusted from the profits of the parent net of the related excess depreciation i.e reducing the parent retained income by (total unrealised profit on asset sale less excess depreciation on the unrealised profit to date).

In my opinion, what would appear correct was that the excess depreciation from the overvaluation af the subsidiary’s asset acquired from parent at fair value was supposed to be an adjustment to the profit of the subsidiary itself.. i.e. add back excess depreciation to subsidiry’s profit. Then calculate NCI based on such an adjusted figure..
Am I making any sense? What do you guys think?

Hi werty,

That’s great… I was referring to Kaplan text to imply ACCA’s view, since the Kaplan texts are approved by ACCA. They(Kaplan) are the ones who deduct URP from the seller but net of depreciation, instead of deducting the excess depreciation from the sub who bought the asset and went on to charge the excess deptn.

However, the ACCA examiner in December 2007 recommends that approach(Kaplan’s) in his sollution to question 1 (as per post exam guidance/answers)

Could it be that ACCA approved Kaplan notes and your good plausible notes (which I concur with on this point of URP, as you say it)could differ on certains key points?