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Hi Sir,
Below is the gist of question
Bubble Co acquired 80% of the $60 million share capital of Salt Co on 1 November 20X6 when Salt Co’s retained earnings were $56 million. Bubble Co has a policy of measuring any non-controlling interest (NCI) at fair value. The fair value of the NCI in Salt Co on 1 November 20X6 was $25 million. Salt Co’s retained earnings at 31 October 20X8 are $74 million.
The junior accountant has included Salt Co in the draft consolidation by adding all of its balances to those of Bubble Co. No further adjustments have been made.
Sir, in the answer they are only allocating profits of $18,000 to the NCI’s share. Can you please why this is happening?
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