The calculation of the NCI on the consolidated SFP starts with the NCI's share of the subsidiary's net assets at the SFP date. Which of the following is not an adjustment that should be made in calculating the ending NCI balance?
A)Unamortized acquisitional fair value adjustments
B)Unrealized profit from upstream sales of capital assets
C)Unrealized profit from upstream sales of inventory
D)Unrealized profit from downstream sales of inventory

Question

Quizplus · Accepted Answer

The calculation of the ending NCI balance should exclude unrealized profit from downstream sales of inventory as it pertains to transactions between the subsidiary and the parent company. The adjustment should focus on the NCI's proportionate ownership of the subsidiary's net assets, which may include unamortized acquisitional fair value adjustments and unrealized profit from upstream sales of capital assets and inventory.

The Calculation of the NCI on the Consolidated SFP Starts