Exam 13: Consolidation: Other Issues

An indirect NCI can exist in an entity only where there is a direct NCI in the immediate parent of that entity.

The process of consolidation is not affected by the fact that acquisitions of subsidiaries may be non-sequential.

It is possible for an entity to lose control over its investment in another entity without a change in their ownership interest.

The pre-acquisition entry for the Baxter group in order to consolidate a 60% interest in a subsidiary contained the following debits. Retained earnings $6000, share capital $12 000, general reserve $2400, BCVR $1200. The direct non-controlling interest's share of the subsidiary's equity at the date of acquisition is:

When calculating the direct non-controlling interest share of equity, consolidation adjustments are needed to:

In a group that has a multiple subsidiary structure, the direct non-controlling interest is entitled to:

An ownership structure in which Orange Limited acquires shares in Pear Limited before Pear Limited acquires shares in Quince Limited is known as:

The pre-acquisition entry is prepared based on the immediate parent's interest in a subsidiary.

Peter Limited has an ownership interest of 80% in a subsidiary John Limited. John Limited owns 60% of Joseph Limited. At acquisition date the retained earnings of Joseph Limited were $200 000. At consolidation date, the retained earnings of Joseph Limited were $440 000. The indirect non-controlling interest in the retained earnings of Joseph Limited is calculated as:

Caloundra Limited has an 85% ownership interest in Minchinton Limited. Minchinton Limited has a 55% ownership interest in Moreton Limited. As a result of these ownership interests, there is a direct ownership interest in Moreton Limited amounting to: