Exam 26: Consolidation: Non-Controlling Interest

Jiminez Limited acquired 80% of the share capital and reserves of Mustang Limited for $180 000. Share capital was $100 000 and reserves amounted to $50 000. All assets and liabilities were recorded at fair value except buildings which was recorded at $10 000 below fair value. The fair value of the NCI at the date of Jiminez's acquisition was $35 000 and the partial goodwill method is adopted by the group. If the company tax rate was 30%, the goodwill recorded in relation to this business combination amounts to:

A non-controlling interest is entitled to a share of which of the following items? I Equity of the parent at acquisition date II Current period profit or loss of the subsidiary entity III Changes in equity of the subsidiary since acquisition date and the beginning of the financial period IV Equity of the subsidiary at acquisition date

According to IFRS 10 Consolidated Financial Statements, the term 'non-controlling interest' means:

For a transaction to require an adjustment to the calculation of a non-controlling interest share of equity it must have the following characteristics: I. The transaction must result in the subsidiary recording a profit or a loss. II. After the transaction the other party to the transaction must have on hand an asset on which unrealised profit is accrued. III. The initial consolidation adjustment must affect both the statement of financial position and statement of comprehensive income.

Jiminez Limited acquired 80% of the share capital and reserves of Mustang Limited for $180 000. Share capital was $100 000 and reserves amounted to $50 000. All assets and liabilities were recorded at fair value except buildings which was recorded at $10 000 below fair value. The fair value of the NCI at the date of Jiminez's acquisition was $35 000. If the company tax rate was 30%, and the partial goodwill method was adopted, the NCI share of equity at the date of acquisition was:

Petros Limited is a subsidiary of Butros Limited. When Butros acquired its 60% interest the retained earnings of Petros Limited were $20 000. At the beginning of the current period Petros Limited's retained earnings had increased to $50 000. Petros earned profit of $10 000 during the current period. The share of the non-controlling interest in the closing retained earnings of Petros Limited at reporting date is:

Lu Nan Limited acquired 80% of the share capital and reserves of Hui Limited for $20 000. Share capital was $10 000 and reserves amounted to $6000. All assets and liabilities were recorded at fair value except plant which was recorded at $1000 below fair value. The company tax rate was 30%. The partial goodwill method is adopted by the group. The amount of goodwill acquired by Lu Nan Limited in this business combination was:

Jiminez Limited acquired 80% of the share capital and reserves of Mustang Limited for $180 000. Share capital was $100 000 and reserves amounted to $50 000. All assets and liabilities were recorded at fair value except buildings which was recorded at $10 000 below fair value. The fair value of the NCI at the date of Jiminez's acquisition was $35 000 and the full goodwill method is adopted by the group. If the company tax rate was 30%, the goodwill recorded in relation to this business combination amounts to:

A Ltd holds a 60% interest in B Ltd. B Ltd sells inventory to A Ltd during the year for $10 000. The inventory originally cost $7000. At the end of the year 50% of the inventory is still on hand. The tax rate is 30%. The NCI adjustment required in relation to this transaction is a debit of:

Company A Limited owns 70% of the share capital of Company B Limited. Company B Limited paid a dividend of $10 000 during the financial period. The adjustment entries in the consolidation worksheet for the dividend include:

Non-controlling interest is classified, according to IFRS 10 Consolidated Financial Statements, as:

A non-controlling interest is a contributor of:

When preparing a set of consolidated financial statements, the pre-acquisition entry relates to:

P Ltd paid $169 600 for 80% of the shares of S Ltd on 1 July 2013. All identifiable assets and liabilities of the subsidiary were recorded at fair value, except for land for which the fair value was $10 000 greater than cost. The tax rate is 30%. The NCI in S Ltd was considered to have a fair value of $42 000 and the group applies the full goodwill method. At acquisition date, the equity of S Ltd consisted of: Share capital $100 000 General reserve $60 000 Retained earnings $40 000 The control premium paid by P Ltd is:

A Ltd holds a 60% interest in B Ltd. A Ltd sells inventory to B Ltd during the year for $10 000. The inventory originally cost $7000. At the end of the year 50% of the inventory is still on hand. The tax rate is 30%. The NCI adjustment required in relation to this transaction is a debit of:

A Ltd holds a 60% interest in B Ltd. On 1 July 2014 B Ltd transferred a depreciable non-current asset to A Ltd at a profit of $5000. The remaining useful life of the asset at the date of transfer was 4 years and the tax rate is 30%. The impact of the above on the NCI share of profit for the year ended 30 June 2015 is:

In respect to the intragroup transfer of services any profit or loss is regarded as:

If a gain on bargain purchase arises on a business combination, the non-controlling interest:

A Ltd holds a 60% interest in B Ltd. On 1 January 2014 B Ltd paid an interim dividend of $25 000 and on 30 June 2014 B Ltd declared a final dividend of $15 000. The NCI journals at 30 June 2014 will include which of the following?

Jiminez Limited acquired 80% of the share capital and reserves of Mustang Limited for $180 000. Share capital was $100 000 and reserves amounted to $50 000. All assets and liabilities were recorded at fair value except buildings which was recorded at $10 000 below fair value. The fair value of the NCI at the date of Jiminez's acquisition was $35 000. If the company tax rate was 30%, and the full goodwill method was adopted, the NCI share of equity at the date of acquisition was: