Exam 6: Partly-Owned Subsidiaries: Indirect Non-Controlling Interest

Which term describes the profits that each entity could distribute if distributions between the interrelated entities were made continuously until next to nothing was left?

Why is the indirect NCI not entitled to any share of pre-acquisition equity under the multiple consolidation method?

Discuss the disadvantages of the sequential consolidation method.

Parent Ltd owns 20% of S1 Ltd and 80% of S2 Ltd.In addition,S2 Ltd owns 70% of S1 Ltd.The total Parent Ltd interest in S1 Ltd is:

The calculation of notional profits of entities with cross-shareholdings is required to:

Explain why indirect ownership interests are not relevant to determining control in a tiered corporate group.

Parent Ltd owns 90% of S1 Ltd and S1 Ltd owns 60% of S2 Ltd.The Parent Ltd NCI indirect ownership interest in S2 Ltd is:

The sequential consolidation method uses a 'top down' approach.

The ultimate parent-immediate parent-subsidiary description applies to corporate groups involving indirect ownership interests.

Indirect NCI are entitled to a share of the pre-acquisition equity of sub-subsidiaries.