Evaluate the value of non-controlling interest, Financial Accounting

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








Balance at the start of the year





TCI for the year (W1)





Share issue (2m x $1.30)






(30) (W2)



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



Adjustment to parent's equity

(37) (W3)




Balance at the end of the year




Working 1



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


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



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



NCI share of TCI



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


Consideration transferred


Value of non-controlling interest transferred


Adjustment to parent equity


Posted Date: 5/29/2013 4:04:56 AM | Location : United States

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