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Hello Good day,
I would like to ask if the following is treated the same way as the rest of the situations or is there a difference.
Parent co. lends money to Sub co. , after a while , the sub co. converts the loan to shares.
Does this have the same treatment, whereby we decrease the NCI.
How exactly would this be dealt with ?
I assume this is for exam purposes – I’m not sure which exam question you have seen this in.
Can you please let me know which question it is.
It wasn’t specifically in a question. It came up while we were in a group discussion and someone mentioned it.
Any hints on this would be greatly appreciated.
In group accounts
Parent now owns more shares in Sub
If there is a NCI it would proportionately get smaller
Usually, in life, there is no NCI, so it doesn’t matter