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Dear sir,
If we don’t show our share of equity in Subsidary company in our group balance sheets, why do we show the NCI’s share of equity?
Example:
P owns 80% of S.
In P’s group accounts, we show only the equity share capital of P, but we also show the NCI of S, which includes the NCI equity.
If we don’t show our own equity, why do we show NCI equity?Thanks sir.
Hi,
Sorry but I don’t fully understand your question but I’ll explain what goes in equity in the hope it clears up any confusion.
The equity section is all about ownership, and showing who owns what within the group. The parent’s shareholders own the shares in the parent so we show their share capital 100% only.
The parent’s shareholders also own 100% of the parent’s retained earnings as well as what they own of the subsidiary’s retained earnings (P’s% x S’s post-acquisition).
The rest of S’s retained earnings post acquisition, are owned by the NCI, hence we include th NCI share of S’s post acquisiton in the NCI section of equity.
Thanks
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