The common stock additional paid in capital and

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The common stock, additional paid-in capital and retained earnings accounts we see on the con- -datedbalance sheet represent those of the parent's shareholders.The retained earnings attributable me parent's shareholders is increased (decreased) by the income (loss) attributable to the parent's holders and is decreased by the dividends paid to the parent's shareholders in a reconciliation ar to the following for Aon: Aon Retained Earnings Account ($ millions) Beginning balance of retained earnings . Net income attributable to parent . Dividends . Other adjustments . Ending balance of retained earnings ........ .............. $7,335 706 (175) (5) $7,861 equity of the noncontrolling interest, however, is only represented by one equity account led Noncontrolling Interest. It is updated similarly to the stockholders' equity for the parent's eholders, that is, it is increased (decreased) by the income (loss) attributable to the noncon- lling shareholders and is decreased by the dividends paid to the noncontrolling shareholders: Aon Noncontrolling Interest Equity Account ($ millions) Beginning balance (fair value at acquisition date) . . . . . . . . . . . . . . $52 Net income attributable to noncontrolling interest. . . . . . . . . . . . . . 26 Dividends declared and paid to noncontrolling shareholders. . . . . (20) Other adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . (3) Ending balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $55 _ gain, although it can be more complicated, if the noncontrolling interest owns 20% of a sub- sidiary company, the balance in the noncontrolling interest equity account will equal 20% of the stockholders' equity of the subsidiary company. (This is not 20% of the consolidated company, y 20% of the subsidiary cornpany.) Finally, the noncontrolling interest equity account is reported as a separate line in the con- solidated stockholders' equity as follows: Aon Consolidated Balance Sheet Stockholders' Equity (In millions except per share amounts) 2010 Common stock-$1 par value Authorized: 750 shares (issued: 2010-385.9; 2009-362.7) _ . Additional paid-in capital _ _. Treasury stock at cost (shares: 2010-53.6; 2009-96.4) . Retained earnings . Accumulated other comprehensive loss _. Total Aon stockholders' equity . Noncontrolling interest ................... •..• ....... •..• ......... Total equity ............................ .......... ............ $ 386 4,000 (2,079) 7,861 (1,917) 8,251 55 $8,306
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8-23 Module 8 I Equity Recognition and Owner Financing [!] Shares issued are recorded as an increase in common stock (for the par value) and additi paid-in capital (for the excess of the value of the shares issued over the par value). ~ combines common stock and additional paid-in capital accounts into one column for t proceeds. The cost of shares repurchased is recorded as treasury stock. The cost of sh reissued and/or retired is recorded as a reduction of the treasury stock account since these .,-- treasury shares. When shares are retired, the par value of the shares retired is removed Analysis and Interpretation of Noncontrolling Interest As we discuss more fully in Module 3, the return on equity (ROE) computation is usually per- formed from the perspective of the parent company's shareholders. Consequently, the numerator is usually the net income attributable to the parent company shareholders and the denominator
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