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Sir,
After reviewing and attempting questions in this area, I am a bit lost as to why at some points we add the NCI and at other points we minus
E.g. if Retained earnings NCI was calculated at $330,000
NCI FV was calculated at (25% 50,000) $12,500
Why did we add the NCI FV in question 4, but we deducted it in previous questions 1 and 2.Sherls
Hi,
Sorry, but I’m not too sure where I see the NCI being subtracted from anything. The NCI is calculated as the NCI at acquisition plus the share of post acquisition movement in net assets. If the movement were to be a reduction in the net assets then it would be the equivalent of a loss, and the figure would be deducted.
Hopefully this helps and if not then please get in touch.
Thanks
Thank You.
I needed to be clear in saying NIC.
After deducting the retained earnings and multiplying it by the NCI’s percentage, why at some point did we deduct it and at other points we added.
NCI FV was calculated at (25% 50,000) $12,500
Why did we add in question 4, but we deducted it in previous questions 1 and 2.Sherls
I don’t think there is any NCI in either Q1 or Q2 as in each scenario we have acquired a 100% subsidiary.
Thanks
Thank you.
This is FR practice ques chap 23 – Consolidated SFP..
question 1 – indicated acquired 70%
and question 2 – indicated 65%Sorry, I thought you were referring to the questions in the class notes. In each of the two questions you mention there is a reduction in the retained earnings of the subsidiary post-acquisition. This equates to a loss and hence why the figure has been deducted.
Thanks
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