• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

NCI Proportion

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › NCI Proportion

  • This topic has 0 replies, 1 voice, and was last updated 5 years ago by awrang.jaji.
Viewing 1 post (of 1 total)
  • Author
    Posts
  • June 15, 2020 at 3:40 am #573807
    awrang.jaji
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    The draft statements of financial position of Ping Co and Pong Co on 30 June 20X8 were as follows.
    STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 20X8
    PING CO PONG CO
    $ $
    Assets
    Non-current assets
    Property, plant and equipment 50,000 40,000
    20,000 ordinary shares in Pong Co at cost 30,000
    80,000
    Current assets
    Inventory 3,000 8,000
    Owed by Ping Co 10,000
    Receivables 16,000 7,000
    Cash 2,000 –
    21,000 25,000
    Total assets 101,000 65,000
    Equity and liabilities
    Equity
    Ordinary shares of $1 each 45,000 25,000
    Revaluation surplus 12,000 5,000
    Retained earnings 26,000 28,000
    83,000 58,000
    Current liabilities
    Owed to Pong Co 8,000 –
    Trade payables 10,000 7,000
    18,000 7,000
    Total equity and liabilities 101,000 65,000
    Ping Co acquired its investment in Pong Co on 1 July 20X7 when the retained earnings of Pong Co stood
    at $6,000. The agreed consideration was $30,000 cash and a further $10,000 on 1 July 20X9. Ping Co’s
    cost of capital is 7%. Pong Co has an internally-developed brand name – ‘Pongo’ – which was valued at
    $5,000 at the date of acquisition. There have been no changes in the share capital or revaluation surplus of
    Pong Co since that date. At 30 June 20X8 Pong Co had invoiced Ping Co for goods to the value of $2,000
    and Ping Co had sent payment in full but this had not been received by Pong Co.
    There is no impairment of goodwill. It is group policy to value non-controlling interest at full fair value. At
    the acquisition date the non-controlling interest was valued at $9,000.
    Required
    Prepare the consolidated statement of financial position of Ping Co as at 30 June 20X8.

    1 Calculate goodwill
    Goodwill
    Group
    $
    Consideration transferred (W2)
    Fair value of NCI
    38,734
    9,000
    Net assets acquired as represented by:
    Ordinary share capital 25,000
    Revaluation surplus on acquisition 5,000
    Retained earnings on acquisition 6,000
    Intangible asset – brand name 5,000
    (41,000)
    Goodwill 6,734
    This goodwill must be capitalised in the consolidated statement of financial position.
    2 Consideration transferred
    $
    Cash paid 30,000
    Fair value of deferred consideration (10,000 x 1 / (1.072
    *)) 8,734
    38,734
    *Note. The deferred consideration has been discounted at 7% for two years (1 July 20X7 to 1 July
    20X9).
    However, at the date of the current financial statements, 30 June 20X8, the discount for one year
    has unwound. The amount of the discount unwound is:
    $
    (10,000 × 1 / 1.07) – 8,734 612
    So this amount will be charged to finance costs in the consolidated financial statements and the
    deferred consideration under liabilities will be shown as $9,346 (8,734 + 612).
    3 Calculate consolidated reserves
    Consolidated revaluation surplus
    $
    Ping Co 12,000
    Share of Pong Co’s post acquisition revaluation surplus –
    12,000
    Consolidated retained earnings
    Ping Pong
    $ $
    Retained earnings per question 26,000 28,000
    Less pre-acquisition (6,000)
    Discount unwound – finance costs (612) 22,000
    Share of Pong: 80% ? $22,000 17,600
    42,988
    4 Calculate non-controlling interest at year end
    $
    Fair value of non-controlling interest 9,000
    Share of post-acquisition retained earnings (22,000 x 20%) 4,400
    13,400

    5 Agree current accounts
    Pong Co has cash in transit of $2,000 which should be added to cash and deducted from the
    amount owed by Ping Co.
    Cancel common items: these are the current accounts between the two companies of $8,000 each.
    6 Prepare the consolidated statement of financial position.
    PING CO
    CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 20X8
    $ $
    Assets
    Non-current assets
    Property, plant and equipment (50,000 + 40,000) 90,000
    Intangible assets: Goodwill (W1) 6,734
    Brand name (W1) 5,000
    Current assets
    Inventories (3,000 + 8,000) 11,000
    Receivables (16,000 + 7,000) 23,000
    Cash (2,000 + 2,000) 4,000
    38,000
    Total assets 139,734
    Equity and liabilities
    Equity
    Ordinary shares of $1 each 45,000
    Revaluation surplus (W3) 12,000
    Retained earnings (W3) 42,988
    99,988
    Non-controlling interest (W4) 13,400
    113,388
    Current liabilities
    Trade payables (10,000 + 7,000) 17,000
    Deferred consideration (W2) 9,346
    Total equity and liabilities 139,734

    How do they get 20% and 80% proportion for NCI and parent share?

  • Author
    Posts
Viewing 1 post (of 1 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • o1lim on Discounted Cash Flow Further Aspects, Replacement – ACCA Financial Management (FM)
  • julio99 on Impairments – Impairment (CGU) – ACCA Financial Reporting (FR)
  • effy.sithole@gmail.com on EPS – diluted EPS Example – ACCA Financial Reporting (FR)
  • Ken Garrett on The Finance Function in the Digital Age – CIMA E1
  • DeborahProspect on ACCA SBR Specimen Exam 2 Question 1

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in