Evaluate the value of non-controlling interest, Financial Accounting

Assignment Help:

The additional 20% purchase by RBE results is enhancing in the controlling interest held in the subsidiary, DCA. No additional goodwill is calculated on the additional purchase as goodwill is only calculated at the date control was gained in accordance with IFRS 3. However, at the date of the further purchase (1 October 2010) the value of NCI needs to be established. The proportion "sold" will be transferred from NCI to parent's equity within the SOCIE. The difference between that value and the consideration transferred is included in parent's equity as an "adjustment to parent equity" on acquisition.

 

Statement of changes in equity for the year ended 31 December 2010 Attributable to equity holders of the parent

Non-controlling interest

Total

Equity

 

$000

$000

$000

 

Balance at the start of the year

3,350

650

4,000

 

TCI for the year (W1)

1,350

150

1,500

 

Share issue (2m x $1.30)

2,600

2,600

 

Dividends

(200)

(30) (W2)

(230)

 

Adjustment to NCI for additional purchase of DCA shares (W3)

(503)

 

Adjustment to parent's equity

(37) (W3)

-

(37)

 

Balance at the end of the year

7,063

267

7,833

Working 1

$000

 

NCI share of total comprehensive income of DCA $600,000:

 

NCI at 30% x $600,000 x 9/12 months

135

 

NCI at 10% x $600,000 x 3/12 months

15

 

NCI share of TCI

150

 

Therefore parent share of TCI of DCA is $600,000 - $150,000 = $450,000.

Total TCI attributable to equity holders of parent is $900,000 +$450,000 = $1,350,000.

Working 2

NCI share of dividend paid April 2010 by DCA = 30% x $100,000 = $30,000.

Working 3

Value of NCI at 1 October 2010 is $650,000+$135,000(W1)-$30,000(W2) = $755,000

Therefore the value transferred is $755,000 x 2/3 = $503,333 Adjustment to parent's equity

$000

Consideration transferred

540

Value of non-controlling interest transferred

(503)

Adjustment to parent equity

37


Related Discussions:- Evaluate the value of non-controlling interest

Budget, the following information relates to Thomas limited who decide to c...

the following information relates to Thomas limited who decide to commence business on 01 January 2016 with R375000 cash: what is his budget for February, march, April?

NON PROFIT ORGANISATIONS, USING PROPER ILLUSTRARTION,ELLOBORATE ON THE REGU...

USING PROPER ILLUSTRARTION,ELLOBORATE ON THE REGULATORY FRAMEWORK THAT SUPPORTS FINANCIAL REPORTING IN NON PROFIT ORGANISATIONS.

#title, A company produces 2 modules of mobile phones. 1.Basic modle is sol...

A company produces 2 modules of mobile phones. 1.Basic modle is sold 5000/=, direct material cost 1250/=, requires 0.25h labour time. Produce unites 8000 per month. 2.smart model

#title.Current Issue in financial Accounting, 2 Individual Research Assignm...

2 Individual Research Assignment This assignment is an individual assessment. The research and written submission should therefore be your own work. You will need to submit this as

Financial accounting theory, accountability through conceptual framework in...

accountability through conceptual framework in australia eassy on this topic with research

Ias1 contents of financial statements, IAS 1 contents of financial statemen...

IAS 1 contents of financial statements IAS 1 prescribes the contents of published financial statements. The major reports that are included as part of the published financial sta

What is the pretax stock compensation, Refer to the Consolidated Statements...

Refer to the Consolidated Statements of Shareholders' Equity (pp. 62-63), Consolidated Statements of Cash Flow, including an abstract from Note 2, Cash Flow Information (pp. 61 and

Financial accounting, The following items are found in the trial balance of...

The following items are found in the trial balance of M/s Sharada Enterprise on 31st December, 2000. 10 marks Summer 2013 Sundry Debtors Rs.160000 Bad Debts written off Rs 9000 Dis

What is depreciation reserve fund, Q. What is Depreciation Reserve Fund ? ...

Q. What is Depreciation Reserve Fund ? Depreciation Reserve Fund is the fund specially reserved for replacement of assets. Once the assets are purchased from the capital money

Company accounts, how do we calculate bonus issu4 and rights issue

how do we calculate bonus issu4 and rights issue

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd