Lecture 9 Consolidation Non Controlling Interest - Chapter 25 Consolidation non-controlling interest Prepared by Emma Holmes Nature and calculation of

Lecture 9 Consolidation Non Controlling Interest - Chapter...

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7/11/2011 1 Chapter 25 Consolidation: non-controlling interest Prepared by Emma Holmes AASB 127 defines non-controlling interest as “that portion of equity of a subsidiary attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by the parent R ll f h t 22 th t t lli i t t Nature and calculation of NCI Recall from chapter 22, that non-controlling interests are classified as a contributor of equity to the group NCI is presented and identified within equity separately from the parent’s equity The NCI is entitled to a share of the consolidated equity. The remainder of this lecture will examine how the NCI’s share of equity is calculated Acquisition analysis, BCVR entries and pre-acquisition eliminations Impact depends on the treatment of goodwill. Two options: Full goodwill method Partial goodwill method Effects of NCI on the consolidation process The investment is eliminated against parent’s share of subsidiary’s pre acquisition equity. Intragroup transactions The full effect of intragroup transactions are adjusted on consolidation regardless of the ownership interest held by the parent Dividends are an exception
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