NCI

What will be reported as NCI on the consolidated SOFP as at 30 9 2014?

the answer is 9700000

at first, i need to write down some relevant information to get NCI based on the answer sheet. i have no idea why the answer sheet uses the difference of depreciations in transferred PPE to get NCI.

………………..Penfold……………….superted
PPE 345000 141000

NCI@DOA 7.2M

iv) Penfold sold an item of plant to Superted on 1 4 2014 for $25 M when its carrying amount was $20M. It had a remaining useful life of 3 years at this date.

My working below

before……………..at the transfer…………….difference

20M…………………..25M
(2M)…………………..(2.5M)
18M……………………22.5M…………………….4.5M

DR CRE 4.5M
CR PPE 4.5M

Subsidiary post acquisition

……………acq……………….reporting…………….post.

sc…………15000………………15000
sp…………..2000……………….2000
Re……………0……………………12000…………..12000

NCI working(20%)

NCI@doa…….7200
post…………….2400
…………………..9600.

i think my working is perfect under what i learn from you and text books.

now i start ot write down what the answer sheet explains to me.

>>
In answer sheets,
The sale of the plant from Penfold to Superted requires an adjustment to the depreciation
charge recorded within the accounts of Superted. The increase in value of $5M will result in an additional depreciation charge of $0.5M($5 *1/5*6/12) to be reversed as part of the PURP adjustment. The NCI’s share of this is $0.5M*20%=0.1M

Therefore 7.2+2.4+0.1= 9.7

Sir, i don’t understand why they add the difference of depn between them to NCI calculation….

now i’m using the Kaplan text book that is the most recent version, but in the previous version, the answer is 9.6M but in this new version the answer is different