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How does this affect consolidated net income

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Question - If goodwill is impaired in a given year, how does this affect consolidated net income attributable to the NCI on the consolidated statement of comprehensive income (SCI) for the year under the FVE method versus the identifiable net assets (INA) approach?

a) Under the FVE method, the consolidated net income attributable to the NCI is reduced by the NCI's proportionate share in the goodwill impairment, whereas under the INA approach it is not. Thus, the amount of consolidated net income attributable to the NCI will be lower when using the FVE method than when using the INA approach.

b) There is no difference in the amount reported for consolidated net income attributable to the NCI on the consolidated SCI. However, NCI on the consolidated statement of financial position (SFP) will be lower when using the FVE method than when using the INA approach.

c) Under the FVE method, the NCI does not share in the goodwill impairment, whereas under the INA approach it does. Thus, the amount of consolidated net income attributable to NCI would be higher when using the INA approach.

d) Under the FVE method, consolidated net income attributable to the NCI is reduced by the proportionate share of goodwill impairment based on the percentage ownership of the parent.

Reference no: EM132965611

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