Exam 21: Consolidation: Non-Controlling Interest

The entry to reflect the NCI share of acquisition date never changes.

The NCI is a contributor of equity to the group.

The NCI is not allocated a share of any BCVR balances where business combination valuation entries are recorded on consolidation,rather than in the subsidiary's books.

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.

The effect on consolidated current year profit of all intragroup transactions involving a partly owned subsidiary must be reflected in Step 3 of the NCI allocation process.

Currimundi Ltd holds a 60% interest in Beach Ltd.Beach Ltd purchases inventory from Currimundi Ltd during the year for $30 000.The inventory originally cost $21 000.At the end of the year 80% of the inventory is still on hand.The tax rate is 30%.The NCI adjustment required in relation to this transaction includes a debit of which of the following?

Consequential depreciation adjustments in relation to assets that were the subject of an upward business combination valuation adjustment must be taken into account when calculating the NCI share of post-acquisition movements in the subsidiary's equity.

Non-controlling interests in the equity of a subsidiary at the date of acquisition are reflected in Step 1 of the NCI allocation process.

AASB 12 Disclosure of Interests in Other Entities requires disclosure of which of the following for each subsidiary that has a 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.

Moffatt Ltd holds a 60% interest in Beach Ltd.Beach Ltd sells inventory to Moffatt Ltd during the year for $20 000.The inventory originally cost $14 000.At the end of the year 80% of the inventory is still on hand.The tax rate is 30%.The NCI adjustment required in relation to this transaction includes which of the following?

Wendy Limited paid $120 000 for 75% of Yum Limited.At the date of acquisition Yum Limited had equity as follows: $\bullet$ share capital of $100 000 $\bullet$ retained earnings of $50 000 $\bullet$ other reserves of $30 000. All of Yum Limited's assets and liabilities were recorded at fair value.The fair value of identifiable net assets acquired by Wendy Limited amounted to:

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.

Happy Ltd holds a 60% interest in Valley Ltd.On 1 July 2018 Valley Ltd sold a depreciable non-current asset to Happy Ltd at a profit before tax of $10 000.The remaining useful life of the asset at the date of sale 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 2019 is:

Beach Limited is a subsidiary of Golden Limited.When Golden acquired its 70% interest in Beach,the retained earnings of Beach Limited were $40 000.At the beginning of the current period,Beach Limited's retained earnings had increased to $100 000.Beach also earned profit of $20 000 during the current period.The NCI's share of the equity of Beach Limited at reporting date is:

A gain recorded by a subsidiary on the sale of a non-current asset to another entity within the group will result in a debit adjustment to the NCI share of current year profit.

Because it is necessary to distinguish between the parent's 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.

Where a partly owned subsidiary has a dividend declared but not yet paid at balance date,the NCI share of equity is reduced by the NCI share of the dividend and the dividend payable to the NCI is eliminated.

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

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?