This decreased aons equity because assets are greaser

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translated into fewer $US at year-end. This decreased Aon's equity (because assets are greaser than liabilities for solvent companies). Tngeneral, unrealized losses (or gains) remain in 0 accumulated comprehensive income as long as the company owns the foreign subsidiarie which the losses relate. The translation adjustments fluctuate between positive and neg - amounts as the value of the $US fluctuates. However, when a subsidiary is sold, any remai:- ing foreign currency translation adjustment (positive or negative) is immediately recognized- current income along with other gains or losses arising from sale of the subsidiary. NONCONTROLLING INTEREST Noncontrolling interest represents the equity of noncontrolling (minority) shareholders who have a claim on the net assets of one or more of the subsidiaries in the consolidated entity. As discuss in Module 9, if a company acquires a controlling interest in a subsidiary, it must con date that subsidiary when preparing its financial statements, thus reporting all of the subsidiary assets and liabilities on the consolidated balance sheet and reporting all of the subsidiary's enues and expenses in the consolidated income statement. If the company acquires less than 11 of the subsidiary, it must still include 100% of the subsidiary's assets, liabilities, revenues expenses in its consolidated balance sheet and income statement, but now there are two gr' • of shareholders that have a claim on the net assets and earnings of the subsidiary company: parent company and the noncontrolling shareholders (those shareholders who continue to 0 shares of the subsidiary company). Consolidated stockholders' equity must now report the equity of these two groups of share- holders and consolidated net income must now be apportioned between the two groups. F. Aon, the consolidated income statement apportions net income as follows: 2 We assume that the company translates the subsidiary'S financial statements using the more common current method, which is required for subsidiaries operating independently from the parent. Under the current rate me most items in the balance sheet are translated using exchange rates in effect at the period-end consolidation date and income statement is translated using the average exchange rate for the period. An alternative procedure is the tem method, covered in advanced accounting courses, which uses historical exchange rates for some assets and liabilities...
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Module 8 I Equity Recognition and Owner Financing 8-22 Aon Consolidated Income Statement ($ millions) Revenues . Expenses ............... .......... ....... ......... Net income '" . Less: Net income attributable to noncontrolling interest . Net income attributable to Aon stockholders . $8,512 7,780 732 26 $ 706 - income is apportioned between the portion attributable to the noncontrolling interest and the 'on attributable to the parent company's shareholders. Although it can be more complicated, its simplest form, if the noncontrolling shareholders own 20% of a subsidiary, 20% of the sub- 's net.income is attributable to that shareholder group and the parent's shareholders received balance of 80%.
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