IAS 21: Effects of Changes in Foreign Exchange Rates - NON CONTROLLING INTEREST

Hi, Thanks for the kind comment, always glad to be of assistance. To calculate the NCI we start by calculating the net assets of the subsidiary in the overseas currency in the net assets working. Do not do any translation yet. The NCI can then be calculated in the usual fashion by taking the NCI at acquisition and the NCI share of the post acquisition movement in net assets, both of which are taken from the net assets working in the overseas currency. Once you have calculated the NCI in the overseas currency then you can translate into the presentation currency of the group using the closing rate. This method works for both the fair value method and proportionate share method, Hope this clears up any confusion. Thanks

Okay. Thanks. Let me work it out.

could you please explain by example

YOUR QUESTION Now my question is on how to compute the NCI in Business Combinations where we have to translate financial statements into the presentation currency of the parent company when NCI is measured at the proportionate share of the net assets of the subsidiary. Do we subject the NCI % share on the translated net assets of the subsidiary? OR NCI at acquisition + NCI share in post acquisition profits of the subsidiary. MY ANSWER The exam has changed a lot in the last 3 years! You no longer have to full consolidations. FX questions will probably ask you to calculate Goodwill and XD reported in OCI. If you were asked NCI - use at acquisition plus % of post acquistion profits plus % of XD on retranslation of opening net assets and profits plus % of XD on translation of goodwill (but only if using full goodwill method) If you want to look at relevant examples look back at our course notes and on-line lecture. But, as I said, the emphasis in the new syllabus is on explanation not calculation - any calculation marks are given for approach.