Which of the following statements is correct?
A) The NCI is not entitled to share the group's profit.
B) Transactions that do not affect profit will not give rise to an adjustment to the NCI.
C) All intragroup transactions have an impact on the NCI share of equity.
D) When the parent entity sells inventories to its subsidiary, a consolidation adjustment needs to be recorded to reduce the NCI.

Question

Quizplus · Accepted Answer

Transactions that do not affect profit will not require any consolidation adjustment in relation to the NCI. A and D are incorrect because the NCI may be entitled to share in the group's profit, and adjustments may be required for intragroup inventory transactions. C is incorrect because not all intragroup transactions have an impact on the NCI share of equity.

Which of the Following Statements Is Correct