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Why did we subtract 200,000 (inventory FV adj) from profit attributable to NCI?
Acq date 1 Jan 20X6
Rep date 30 Sep 20X6
At acq, inventory of $800,000 had a fair value of $1m. All of this inventory had been sold by 30 sep 20X6.
(consolidated statement of profit and loss)
At the acquisition date we add in the FV adjustment of 200,000 in the net asset working. We do not show this figure in the net assets at the reporting date as the inventory has been sold, so the FV adjustment no longer exists.
The movement is therefore a reduction in net assets of the subsidiary and hence why this movement of 200,000 is a reduction in the NCI, presumably with the NCI share applied to it.
I got it.
Thank you 🙂