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NCI at disposal

Forums › Ask CIMA Tutor Forums › Ask CIMA F2 Tutor Forums › NCI at disposal

  • This topic has 3 replies, 3 voices, and was last updated 4 years ago by P2-D2.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • September 10, 2018 at 12:20 pm #472513
    Anjali
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    Hello, Hope you’re doing well.

    I have my F2 OT in three days and I am still struggling with the control to control transfers. For e.g. if there is an increase in NCI from 20 to 25%, then we calculate the change in NCI by calculating NCI @acq + NCI% of post acq – any impairment (if applicable)= total NCI
    this number is then multiplied with 5%/20%x the total NCI.

    I notice some examples have only the change say 5% multiplied by NCI. And some exmaples have NCI= total assets at disposal plus goodwill x NCI%.

    Is there a consistent formula or am I missing something?

    Thank you,

    AJ

    September 11, 2018 at 9:32 pm #473511
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7156
    • ☆☆☆☆☆

    Hi,

    No you aren’t missing something as there are different treatments for effectively the same thing. Technically the first method that you mention at the top is correct and the second one you mention is a shortcut that should get you the same answer.

    In the exam try to use the first method, and if the information isn’t available in the question then use the second method.

    Thanks

    September 8, 2020 at 10:05 am #584032
    nhatminh2810
    Member
    • Topics: 1
    • Replies: 4
    • ☆

    Hi, could you please show me the correct answer for 2 methods:

    e.g.
    Acquisition at year start:
    FV of NCI at acquisition: 2
    FV of NA at acquisition: 5
    Goodwill: 7

    Profit for the year of subsidiary: 10
    Suppose NCI increase from 20 to 30% at year end

    Method 1:
    Carrying value of CGU at transfer: 7+ 5 + 10 = 22
    Transfer to NCI: 22 * 10% = 2.2
    NCI at year end: 2 + 10*20% + 2.2 = 6.2

    Method 2:
    NCI prior to transfer: 2 + 10*20% = 4
    Transfer to NCI: 4 * 10%/20% = 2
    NCI at year end: 4 + 2 = 6

    I expect same results under both methods, please help. Thanks.

    September 14, 2020 at 5:32 pm #585601
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7156
    • ☆☆☆☆☆

    Hi,

    I’d just focus on the one method and that is the first one as it is much more straightforward.

    Thanks

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