Unit 11 - Grp Rep - Consol Fin Stat

80 cost of investment in subsidiary accounting issues

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Unformatted text preview: n H S • How to account for partial acquisition in group a/c ? 80% Cost of Investment in Subsidiary Accounting issues: 80% owned by H Ltd. • How to account for noncontrolling interests in group a/c ? 20% Non-controlling Interest 9 Accounting for Non-controlling Interests • Non-controlling interests are that portion of the profit or loss and net assets of subsidiaries attributable to equity interests that are not owned, directly or indirectly to the parent. • Thus, the minority shareholders’ share of the portion of share capital and reserves (including retained profits) of the subsidiaries should be presented, within the equity, as a separate item from the parent shareholders’ equity in the consolidated financial statements. 10 (c) Pre-acquisition and Post-acquisition Profits in Subsidiary Pre-acquisition Profits Post-acquisition profits Profits earned by the subsidiary before the acquisition date; Represent part of the net assets being acquired and should be eliminated against...
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This document was uploaded on 04/03/2014.

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