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Dividend paid to nci

This topic has 2 replies, 2 voices, and was last updated 1 year ago by Stephen Widberg.

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April 27, 2021 at 4:03 pm #618998
dvamfire
- Topics: 36
- Replies: 29
Hello sir, I would like to ask a question..

When Subs pay dividend amounting to $10k and Holding co holds 70% shares in Subs.

So the elimination of intra company div .. i understood. But why there is no impact to nci when subs pay dividend?
April 28, 2021 at 4:57 am #619023
dvamfire
- Topics: 36
- Replies: 29
I get confused because there are 2 method to find fv of nci at date of disposal under proportionate goodwill method.

First method is..
1. FV of NA @DOD x NCI%

And

second method is …
FV of NCI @ DOA
Add : Sub’s post profit x nci %

If the question states the dividend paid is $10000… why we dont take S’s post profit minus dividend? Why only profit after tax?
April 28, 2021 at 11:39 am #619070
Stephen Widberg
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- Topics: 10
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If you are trying to calculate Pre or Post acq profits or Net assets – the rule is that dividends are on a cash not accruals basis (are they paid before or after whatever date you are looking at?)

I would advise you not to worry too much as, apart from cash flows, there has been no mention of dividends in this exam for many years. The examiner is more interested in testing us on much more disgusting things!
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