How is the portion of consolidated earnings to be assigned to non-controlling interest in consolidated financial statements determined?
A)The net income of the parent is subtracted from the subsidiary's net income to determine the non-controlling interest.
B)The subsidiary's net income is extended to the non-controlling interest.
C)The amount of the subsidiary's earnings is multiplied by the non-controlling's percentage ownership and is adjusted for the excess cost amortization applicable to the NCI.
D)The amount of consolidated earnings determined on the consolidated working papers is multiplied by the non-controlling interest percentage at the balance-sheet date.

Question

How is the portion of consolidated earnings to be assigned to non-controlling interest in consolidated financial statements determined?​
A)​The net income of the parent is subtracted from the subsidiary's net income to determine the non-controlling interest.
B)​The subsidiary's net income is extended to the non-controlling interest.
C)​The amount of the subsidiary's earnings is multiplied by the non-controlling's percentage ownership and is adjusted for the excess cost amortization applicable to the NCI.
D)​The amount of consolidated earnings determined on the consolidated working papers is multiplied by the non-controlling interest percentage at the balance-sheet date.

Quizplus · Accepted Answer

The amount of the subsidiary's earnings is multiplied by the non-controlling's percentage ownership and is adjusted for the excess cost amortization applicable to the NCI. This method reflects the proportionate share of the subsidiary's earnings that belongs to the non-controlling interest.

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