Good day Mr. Moffat ,
in question 25.2 the % of non controlling interest in task 5 when asked the amount of non controlling interest in the SOPL is shown as 30%. .
I understand we use the profit for the year for Bury and multiply by the % of controlling interest.
but why is the % of controlling interest 30%
what information indicates this. By my logic the % of non controlling interest would be 11,800/total value, which is 32800. but that works out to be a percentage of 35.9%
I have the same issue with the subsequent part of task 3 relating to the share of post aquisition retained earnings .
Also in 25.4 , when finding the attributable profit for NCI a percentage of 25% is used.
How do we determine this?
Ask the Tutor ACCA FA
FA Revision kit 25.2/25.4
4y ago#1Bury has 30M shares in issue (as per their SOFP).
Black owns 21M shares in Bury.
Therefore Black owns 21/30 = 70% and the non-controlling interest is 30%.
(The $11.8M is the fair value of the non-controlling interest at the date of acquisition)
In question 25.4, Liverton owns 3M shares in Everpool Everpool has 4M shares in issue. Therefore Liverton owns 3/4 = 75% and the non-controlling interest is 25%.
I do suggest that you watch my free lectures on this. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
ah sir yes i see now a bit silly on my part . i have watched all the lectures and through them been able to grasp a good understanding of the paper.
However, one small issue . i understand liverton has 3mil shares in everpool . But wont we value them at 3.5mil as stated in the question?
Or do we normally value of % control based on the number of shares owned as opposed to the value of shares owned?
4y ago#3Control is calculated based on the number of shares.
The fair value of the NCI is only relevant when calculating the goodwill arising on consolidation.
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