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Good Night,
1] Dividends paid to the NCI
I noted in the BPP standard working that the NCI share of total comprehensive income is included. However, why isn’t profit for the year attributable to the the NCI included?
If there is a step acquisition, would this be reflected as a debit to the NCI?
If there is a partial disposal (90% – 60%), would this be reflected as a credit to the NCI?
I also noted in the BPP standard working “Non-Cash items”. Would an example of this be the NCI share of impairment losses or exchange differences provided the full goodwill method is being used?
I’m trying to understand the rationale for dividends paid to NCI being classified as financing activities as opposed to investing activities? Can you clarify?
Hi,
If we are including the total comprehensive income then this includes the profit for the year figure.
A step acquisition will reduce the NCI, hence a debit entry. A step disposal will increase the NCI, hence a credit entry.
Yes, the impairment and exchange differences are non-cash items.
Dividends paid to the NCI will go through financing activities.
Thanks
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