a) Where the parent company does not hold 100 percent equity of the subsidiary company, what portion of the intra-group transactions between the parent entity and the subsidiary entity will need to be eliminated on consolidation?(b) What is a non-controlling interest, and how should it be disclosed?(c) How are non-controlling interests affected by intra-group transactions? (d) What are the three steps we use to calculate total non-controlling interest?

a) Where the parent company does not hold 100 percent equity of the subsidiary company, what portion of the intra-group transactions between the parent entity and the subsidiary entity will need to be eliminated on consolidation?(b) What is a non-controlling interest, and how should it be disclosed?(c) How are non-controlling interests affected by intra-group transactions? (d) What are the three steps we use to calculate total non-controlling interest?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 13DQ

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

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a) Where the parent company does not hold 100 percent equity of the subsidiary company, what portion of the intra-group transactions between the parent entity and the subsidiary entity will need to be eliminated on consolidation?
(b) What is a non-controlling interest, and how should it be disclosed?
(c) How are non-controlling interests affected by intra-group transactions?
(d) What are the three steps we use to calculate total non-controlling interest?

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What is the correct method for treating a vesting differential linked to the acquisition of shares? privileged rights of the subsidiary by the parent company? Select an answer: a. It must be allocated to identifiable net assets or goodwill. b. It must be distributed in proportion to the identifiable assets and liabilities of the subsidiary. c. It must be charged to consolidated retained earnings or credited to contributed surplus. d. It must be taken care of in the current year.
Companies are required to value non-controlling interests on the acquisition date. Wat approaches might a company take to value non-controlling interest?
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What is a noncontrolling interest? Select one: A. A component of debt representing amounts owed to a subset of investors B. Amounts distributed to investors that own less than a controlling interest C. The portion of a subsidiary’s net assets not owned by the parent-company D. An amount equal to investor contributions less dividends distributed
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Which of the following is not an application of the acquisition method? a. Measuring the non-controlling interest at the non-controlling interest’s proportionate share in the acquiree’s net identifiable assets or fair value, whichever is higher. b. Measuring the consideration transferred at fair value. c. Identifying the acquirer which is the entity that obtains control over another business in a business combination. d. Determining the acquisition date which is the date the acquirer obtains control over acquiree.
PLEASE EXPLAINATION FULL DETAILS.
When in the consolidated balance sheet should non-controlling interests be required?
How is the Non-Controlling Interest displayed in a consolidated balance sheet? a. As a separate item in the stockholder’s equity section b. By means of a note to consolidated financial statements c. As a separate item between the liabilities and stockholder’s equity d. As a deduction from goodwill, if any e. Non-controlling interest is never presented in consolidated balance sheet.
Which one of the following statements is incorrect with regards to non-controlling interests? 1. Non-controlling interests can be calculated using the analysis of owners’ equity of the subsidiary. 2. The retained earnings total in the consolidated statement of changes in equity does not include the non-controlling interests amount. 3. Non-controlling interests reduces the profit of the owners of the parent in the consolidated statement of profit or loss and other comprehensive income. 4.Non-controlling interests are presented as an asset in the consolidated statement of financial position.
Where are only a proportion of a subsidiary's shares owned by a parent entity? What proportion of the intragroup transactions between the parent entity and the subsidiary will need to be eliminated on consolidation?
The motivation of a parent company to purchase the outstanding bonds of a subsidiary could be to: a. replace the existing debt with new debt at a lower interest rate. b. reduce the parent company's acquisition price for the subsidiary. c. increase the parent company's ownership percentage in the subsidiary. d. create interest revenue to offset interest expense in future income statements.