Which of the following statements is incorrect?
A) The NCI is unaffected by the existence of any gain on bargain purchase.
B) The NCI share of equity at acquisition date is adjusted for its share of any gain on bargain purchase.
C) Any gain on bargain purchase is recognised in the pre-acquisition entry.
D) The pre-acquisition entry only adjusts for the parent's share of the pre-acquisition equity.

Question

Quizplus · Accepted Answer

The NCI share of equity at the acquisition date is not adjusted for its share of any gain on bargain purchase. Instead, gains on bargain purchases are typically recognized in full by the parent company in the consolidated financial statements, not allocated between the parent and the non-controlling interest (NCI).

Which of the Following Statements Is Incorrect