Company Accounting Study Set 1
Quiz 21: Consolidation: Non-Controlling Interest
The Full Effects of Transactions Between Entities Within a Group
The full effects of transactions between entities within a group are eliminated on consolidation,regardless of the existence of an NCI.
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Where a partly owned subsidiary has a dividend declared but not yet paid at balance date,the NCI share of equity is reduced by the NCI share of the dividend and the dividend payable to the NCI is eliminated.
Because it is necessary to distinguish between the parent's share and the NCI share of equity in the consolidated financial statements,extra columns are added in the consolidation worksheet to divide the group equity into the NCI share and the parent's share.
Non-controlling interests in the equity of a subsidiary at the date of acquisition are reflected in Step 1 of the NCI allocation process.
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