Exam 12: Consolidation: Non-Controlling Interest

For transactions involving intragroup services, it is assumed that the profit is realised by the group immediately on payment within the group. Therefore, no NCI adjustments are made on consolidation in relation to such transactions.

When preparing consolidated financial statements, any profit or loss that arises in relation to the intragroup transfer of services is regarded as:

A current year transfer by a partly owned subsidiary of a pre-acquisition balance from the general reserve to retained earnings is ignored when preparing the NCI journals as there has been no change in total equity.

Mooloolaba Limited owns 90% of the share capital of Maroochydore Limited. Maroochydore Limited paid a dividend of $40 000 during the financial period. The adjustment entries in the consolidation worksheet for the dividend include which of the following?

Where a subsidiary records a gain on the intragroup sale of a non-current depreciable asset to another entity within the group, NCI adjustments are required in relation to both the gain on sale as well as the consequential depreciation adjustments resulting from the group's continued use of the asset.

Because it is necessary to distinguish between the parents share and the NCI share of equity in the consolidated financial statements, extra columns are added in the consolidation worksheet to divide the group equity into the NCI share and the parent's share.

The consolidated statement of comprehensive income must separately disclose the consolidated profit for the period attributable to equity holders of the parent and the NCI.

King Limited paid $220 000 for 70% of Prince Limited. At the date of acquisition Prince Limited had share capital of $200 000 and retained earnings of $100 000 and all of Prince Limited's assets and liabilities were recorded at fair value. The fair value of identifiable net assets acquired by King Limited amounted to:

During the current year, a partly owned subsidiary has made a transfer from a general reserve to retained earnings. Which of the following lines would appear in the NCI consolidation entry relating to the current year transfer?

The NCI is a contributor of equity to the group.