In the preparation of a consolidated statement of cash flows using the indirect method of presenting cash flows from operating activities, the amount of the noncontrolling interest in consolidated income is:
A) combined with the controlling interest in consolidated net income.
B) deducted from the controlling interest in consolidated net income.
C) reported as a significant noncash investing and financing activity in the notes.
D) reported as a component of cash flows from financing activities.

Question

Quizplus · Accepted Answer

The noncontrolling interest in consolidated income is combined with the controlling interest in consolidated net income when preparing a consolidated statement of cash flows using the indirect method. This approach ensures that the statement reflects the total income attributable to both the parent company and the noncontrolling interests.

In the Preparation of a Consolidated Statement of Cash Flows