- This topic has 3 replies, 2 voices, and was last updated 6 years ago by
.
- Posts
Hello Chris.
Is an associate and a NCI the same thing?
If company A owes 75% of shares in company B and 25% of shares in company C, does it mean that from the perspective of company C it is a NCI and from the perspective of company A it is an associate?
Thanks.
Hi,
No, they’re not the same thing. An associate is where we have significant influence over an entity and equity account for our investment. The NCI is the amount of an entity that is not owned by the parent company and is reflected within the group accounts.
In your example above, company A has control of company B as it owns 75%, and there is a 25% NCI interest. This 25% will be owned by various other investors. Company A also may have significant influence over company C and so will equity account for the 25% holding.
Thanks
Therefore when company C will consolidate, it will view company A as the NCI?
- You must be logged in to reply to this topic.