Question 1

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.

Accepted Answer

A) True 
 B)False

Question 2

According to AASB 10 Consolidated Financial Statements,a non-controlling interest is classified as:

Accepted Answer

A) part of the parent entity's equity. 
B) part of the group's equity. 
C) a liability of the parent entity. 
D) an asset of the group.

Question 3

The NCI is unaffected by the existence of any gain on bargain purchase.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not one of the 3 steps in calculating the NCI's share of the recorded equity of the subsidiary?

Accepted Answer

A) Determine NCI share of the changes in equity in the current period. 
B) Determine the NCI share of equity of the subsidiary at acquisition date. 
C) Determine the NCI share of the subsidiary's equity between the date of acquisition and the beginning of the current period. 
D) Determine the NCI share of the subsidiary's equity prior to the date of acquisition.

Question 5

A non-controlling interest in the net assets of a subsidiary consists of the non-controlling interest's share at the date of the business combination:

Accepted Answer

A) less 100% of any post-acquisition dividends paid. 
B) less the parent's share of any post-acquisition dividends paid or declared. 
C) plus a share of the changes in the subsidiary's equity since the business combination. 
D) less the non-controlling proportionate share of changes since the combination.

Question 6

Ownership interests in a subsidiary entity that do not belong to the parent entity are known as:

Accepted Answer

A) unowned interests. 
B) non-controlling interests. 
C) external equity interests. 
D) non-parent interests.

Question 7

Fisher Limited acquired 75% of the share capital and reserves of Man Limited for $150 000.The equity of Man Limited consisted of share capital of $100 000 and reserves of $60 000.All assets and liabilities were recorded at fair value except plant and equipment which were recorded at $10 000 below fair value.The company tax rate was 30%.The partial goodwill method is adopted by the group.The amount of goodwill acquired by Fisher Limited in this business combination was:

Accepted Answer

A) $17 000. 
B) $24 750. 
C) $30 000. 
D) $112 500.

Question 8

Where a subsidiary is partly owned by a parent and an NCI,both the BCVR entries and the pre-acquisition entries are adjusted to reflect only the parent's share of the subsidiary's equity balances.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is incorrect?

Accepted Answer

A) Under the partial goodwill method,the NCI is measured at fair value at acquisition date. 
B) Under the partial goodwill method,the NCI is measured as a proportion of the net fair value of the subsidiary's identifiable assets and liabilities at acquisition date. 
C) Extra columns are added to the consolidation worksheet to divide the group's equity into the NCI share and the parent's share. 
D) The adjustments for intragroup transactions are the same whether the subsidiary is wholly owned or whether there is an NCI in the subsidiary.

Question 10

The NCI is entitled to a share of the consolidated equity of the group.

Accepted Answer

A) True 
 B)False

Exam 21: Consolidation: Non-Controlling Interest

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.

According to AASB 10 Consolidated Financial Statements,a non-controlling interest is classified as:

The NCI is unaffected by the existence of any gain on bargain purchase.

Which of the following is not one of the 3 steps in calculating the NCI's share of the recorded equity of the subsidiary?

A non-controlling interest in the net assets of a subsidiary consists of the non-controlling interest's share at the date of the business combination:

Ownership interests in a subsidiary entity that do not belong to the parent entity are known as:

Where a subsidiary is partly owned by a parent and an NCI,both the BCVR entries and the pre-acquisition entries are adjusted to reflect only the parent's share of the subsidiary's equity balances.

Which of the following statements is incorrect?

The NCI is entitled to a share of the consolidated equity of the group.