Exam 27: Consolidation: Non Controlling Interest

A Ltd holds a 60% interest in B Ltd. On 1 July 2014 B Ltd transferred a depreciable non-current asset to A Ltd at a profit of $5000. The remaining useful life of the asset at the date of transfer was 4 years and the tax rate is 30%. The impact of the above on the NCI share of profit for the year ended 30 June 2015 is:

A non-controlling interest is a contributor of:

Jiminez Limited acquired 80% of the share capital and reserves of Mustang Limited for $180 000. Share capital was $100 000 and reserves amounted to $50 000. All assets and liabilities were recorded at fair value except buildings which was recorded at $10 000 below fair value. If the company tax rate was 30%, and the partial goodwill method was adopted, the NCI share of equity at the date of acquisition was: 27)4 Identify how the existence of an NCI affects the consolidation process, particularly in the measurement of goodwill.

Which of the followings is not the reason of why entities do not use the full goodwill method? I made a change to the original question, as the original question is very similar to Q3.

Company A Limited owns 90% of the share capital of Company B Limited. Company B Limited paid a dividend of $20 000 during the financial period. The adjustment entries in the consolidation worksheet for the dividend include:

Xin Limited paid $12 000 for 75% of Yan Limited. At the date of acquisition Yan Limited had equity as follows: Share capital of $10 000 Retained earnings of $5000 Other reserves of $3000 All of Yan Limited's assets and liabilities were recorded at fair value. The fair value of identifiable net assets acquired by Xin Limited amounted to:

Jiminez Limited acquired 80% of the share capital and reserves of Mustang Limited for $180 000. Share capital was $100 000 and reserves amounted to $50 000. All assets and liabilities were recorded at fair value except buildings which was recorded at $10 000 below fair value. The fair value of the NCI at the date of Jiminez's acquisition was $35 000 and the full goodwill method is adopted by the group. If the company tax rate was 30%, the goodwill recorded in relation to this business combination amounts to:

In Sunrise Group's consolidation worksheet, the opening balance of Retained Earnings under 'Group' column shows a balance of $90 000. If there is a debit entry of $22 000 in the NCI column, the opening balance of Retained Earnings under 'Parent' column would be: I made a change to the original question, as the original question is very similar to Q2 of the SPQ.

If a gain on bargain purchase arises on a business combination, the non-controlling interest:

Under the full goodwill method: I made a change to the original question, as the original question is very similar to Q3 of the SPQ.

Non-controlling interest is classified, according to AASB 10 Consolidated Financial Statements, as:

For a transaction to require an adjustment to the calculation of a non-controlling interest share of equity it must have which of the following characteristics: I. The transaction must result in the subsidiary recording a profit or a loss. II. After the transaction the other party (not the non-controlling party) must have on hand an asset on which unrealised profit is accrued. III. The initial consolidation adjustment must affect both the statement of financial position and statement of comprehensive income.

Xana Limited paid $110 000 for 60% of Yama Limited. At the date of acquisition Yama Limited had share capital of $100 000 and retained earnings of $50 000 and all of Yama Limited's assets and liabilities were recorded at fair value. The fair value of identifiable net assets acquired by Xana Limited amounted to:

A non-controlling interest is entitled to a share of which of the following items? I Equity of the group entity at acquisition date II Current period profit or loss of the subsidiary entity III Changes in equity of the subsidiary since acquisition date and the beginning of the financial period IV Equity of the subsidiary at acquisition date

When preparing a set of consolidated financial statements, the pre-acquisition entry relates to:

A non-controlling interest in a subsidiary entity is entitled to a share of the following items: I II III IV Subsidiary equity at acquisition date Yes Yes Yes Yes Changes in equity since acquisition date Yes No No Yes Changes in equity of the current period No Yes No Yes

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

The non-controlling interest columns on a consolidation worksheet are used to:

Petros Limited is a subsidiary of Butros Limited. When Butros acquired its 60% interest, the retained earnings of Petros Limited were $20 000. At the beginning of the current period Petros Limited's retained earnings had increased to $50 000. Petros earned profit of $10 000 during the current period. The share of the non-controlling interest in the equity of Petros Limited at reporting date is:

In respect to the intragroup transfer of services, any profit or loss is regarded as: