However not all intragroup transactions have an

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However, not all intragroup transactions have an effect on the NCI share of equity. Note two features of the intragroup transactions that will affect the NCI calculation. The transactions must affect proft/loss and not only individual accounts of income and expenses. 27
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Adjusting NCI for the effects of intragroup transactions The transactions must affect the proft/loss of the subsidiary. The adjustments to the NCI for an intragroup transaction are determined when the adjustments are made for the full effects of the intragroup transaction in the ‘Adjustment’ column of the consolidation worksheet. 28
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Gain on bargain purchase In the rare case that a gain on bargain purchase arises as a result of a business combination, such a gain has no effect on the calculation of the NCI share of equity. The gain is made by the parent paying less than the net fair value of the identifable assets acquired and liabilities assumed of the subsidiary. The NCI receives a share of the net assets of the subsidiary, and has no involvement with the gain on bargain purchase. 29
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Gain on bargain purchase Assuming all fair values have been measured accurately, the consolidation worksheet entries at acquisition date are: Business combination valuation entry Pre acquisition entry NCI (step 1) . 30
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Disclosure AASB 12/IFRS 12 Disclosure of Interests in Other Entities also contains disclosures requirements for subsidiaries in which there are NCI. Paragraph 12 of AASB 12/IFRS 12 states: An entity shall disclose for each of its subsidiaries that have non controlling interests that are material to the reporting entity: The name of the subsidiary. The principal place of business of the subsidiary. 31
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Disclosure The proportion of ownership interests held by non controlling interests. The proportion of voting rights held by non controlling interests, if different from the proportion of ownership interests held. The proft or loss allocated to non controlling interests of the subsidiary during the reporting period. 32
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Disclosure Accumulated non controlling interests of the subsidiary at the end of the reporting period. Summarised fnancial information about the subsidiary. 33
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Summary For the books of consolidation the NCI has no effect on the business combination valuation entries NCI does have effect on pre-acquisition entries The calculation of the NCI share of equity is affected by the existence of intra-group transactions – remember 3 steps Share of equity at acquisition date Share of changes btn acq. Date and beg of current period Share of changes in equity in current period NCI share of equity must be disclosed in consolidated fnancial statements 34
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