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Sir I want to know while calculating NCI why do we deduct investment in sub-subsidiary.
Thanks.
It’s explained in the video lectures but, briefly, if we are to calculate by the “direct method” the nci interest in the sub-subsidiary, they are credited with their “total” percentage of the sub-subsidiary’s activities. When calculating the nci share of the subsidiary’s activities, one of those subsidiary activities is their investment in the sub-subsidiary. If we don’t eliminate the subsidiary’s investment in the sub-subsidiary, then we shall be double-counting that amount when calculating the nci
It’s not easy to put clearly in writing so (I hesitate to say this!) if you cannot understand what’s happening, just do it!
Sir, understand that Indirect Holding adjustment is needed when calculating cost of investment & NCI in sub-subsidiary however does it applicable for calculating Carrying Value of Investment in Indirect Associates?
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