The Statements of Financial Position for company P and company S are shown below:

At the time of the acquisition,the net asset value of S was £50,000.This was £40,000 share capital plus £10,000 retained earnings.If company P owns 75% of Company S,then the consolidated Statement of Financial Position will include:
A) 100% of the assets and liabilities of P and 75% of the assets and liabilities of S
B) 100% of the assets and liabilities of P and 50% of the assets and liabilities of S
C) 100% of the assets and liabilities of P and 100% of the assets and liabilities of S
D) 75% of the assets and liabilities of P and 75% of the assets and liabilities of S

Question

The Statements of Financial Position for company P and company S are shown below:

At the time of the acquisition,the net asset value of S was £50,000.This was £40,000 share capital plus £10,000 retained earnings.If company P owns 75% of Company S,then the consolidated Statement of Financial Position will include:
A) 100% of the assets and liabilities of P and 75% of the assets and liabilities of S 
B) 100% of the assets and liabilities of P and 50% of the assets and liabilities of S 
C) 100% of the assets and liabilities of P and 100% of the assets and liabilities of S 
D) 75% of the assets and liabilities of P and 75% of the assets and liabilities of S

Quizplus · Accepted Answer

The SoFP will show 100% of the assets and liabilities of P and of S, as P is a controlling interest. It will ALSO show the value of the goodwill, and the 25% non-controlling interest.
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The Statements of Financial Position for Company P and Company