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Percentage of NCI

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Percentage of NCI

  • This topic has 7 replies, 2 voices, and was last updated 8 years ago by MikeLittle.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • August 14, 2016 at 8:43 pm #333173
    Riaa
    Participant
    • Topics: 8
    • Replies: 8
    • ☆

    Hi
    i need help calculating the percentage of NCI in the following question. Can you please assist with the question below:

    BPP revision kit question 133

    Plateau MCQ case
    On 1 October 20X6 Plateau acquired the following non-current investments :

    -3 million equity shares in Savannah by an exchange of one share in Plateau for every two shares in Savannah plus $1.25 per acquired Savannah share in cash. The market price of each Plateau share at the date of acquisition was $6 and the market price of each Savannah share at the date of acquisition was $3.25

    – 30% of the equity shares of Axle at a cost of $7.50 per share.

    August 15, 2016 at 9:30 am #333230
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    With reference to the nci in Axle, Plateau IS the nci – they own 30% so someone else (singular or plural) owns the majority 70%

    As for Savannah – it’s a 75% holding

    All clear?

    August 15, 2016 at 9:31 am #333231
    Riaa
    Participant
    • Topics: 8
    • Replies: 8
    • ☆

    I may have worded this incorrect, I mean how do I calculate the percentage that the parent company has acquired in Savannah. So that I can calculate the NCI that would appear on the Consolidated FP. I have had a look at the answer and it has stated the NCI percentage is 25%. But I cannot seem to calculate how they got P—>S to be 75% ?

    Can you please assist me further ? I look forward to your response.

    August 15, 2016 at 9:48 am #333239
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    How many shares did Plateau in Savannah?

    What is the Savannah share capital?

    Can you take it from there?

    August 15, 2016 at 9:51 am #333241
    Riaa
    Participant
    • Topics: 8
    • Replies: 8
    • ☆

    I am really sorry but I have been stuck on this question for 2 hours. If you could kindly tell me how you got the 75% in this question then I can know what to do next time. Please can you tell me how to calculate the acquired holding percentage I do not know what to do.

    August 15, 2016 at 10:11 am #333250
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    Riaa, these are the steps that you follow in every consolidation question

    Ask yourself these two questions:

    – How many shares did Plateau buy in Savannah?

    – What is the Savannah share capital?

    Can you take it from there?

    If you can’t, ok post again and I’ll put it in words of one syllable … no worries

    August 15, 2016 at 10:23 am #333252
    Riaa
    Participant
    • Topics: 8
    • Replies: 8
    • ☆

    Hi Mike

    I still cant get 75%. This is the furthest I can get.

    P bought 1 for every 2, which gives me 3,000/2= 1,500.
    Then S equity shares are 4,000.
    4,000/1,500 = 2.667 ?? this is not 75%.

    Please can you help me to get to the 75% ?

    Kind Regards,

    August 15, 2016 at 12:42 pm #333270
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    Rita! P bought 3,000,000 Savannah shares

    Savannah had 4,000,000 $1 shares in issue

    If P bought 3,000,000 of that 4,000,000 what percentage is that?

    What makes you think that the nci percentage in Savannah may be influenced by the number of shares that Plateau issues?

    Better?

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