Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

Save 20% on ACCA & CIMA Books

Interactive BPP books for June 2026 exams, recommended by OpenTuition.
Get discount code >>

associates

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › associates

Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 2, 2018 at 7:27 am #465679
    Avataradarsh1997
    Participant

    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.

    August 3, 2018 at 1:39 pm #465977
    AvatarP2-D2
    Keymaster

    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

    August 3, 2018 at 3:34 pm #465985
    Avataradarsh1997
    Participant

    Therefore when company C will consolidate, it will view company A as the NCI?

    August 5, 2018 at 4:30 pm #466296
    AvatarP2-D2
    Keymaster

    Hi,

    No, company C has no investments in any of the other companies so will not be consolidating anything. It is only company A that is preparing consolidated accounts, with company B as the subsidiary and a 25% NCI.

    Thanks

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.