Which of the following statements is correct?
I made a change to the original question, as the original question is very similar to Q22.
A) The NCI is not entitled to share the group's profit.
B) Transactions that do not affect profit will not give rise to an adjustment to the NCI.
C) All intragroup transactions have an impact on the NCI share of equity.
D) When parent entity sells inventory to its subsidiary, a consolidation adjustment needs to be recorded to reduce the NCI.

Question

Quizplus · Accepted Answer

Statement B is true. According to the International Financial Reporting Standards (IFRS), adjustments to the Non-controlling interest (NCI) are only made for transactions that affect profit or loss. Therefore, transactions that do not impact the group's profit or loss will not require adjustments to the NCI. Statements A, C, and D are not correct. The NCI is entitled to share the group's profit, all intragroup transactions do not affect the NCI share of equity, and the sale of inventory from a parent entity to its subsidiary will not necessarily lead to a consolidation adjustment to reduce the NCI.

Which of the Following Statements Is Correct