23. Group Accounts: The Consolidated Statement of Financial Position (2)

Question 1

How is the fair value of non-controlling interest calculated?

Answer 1

The value of the subsidiary * the percentage of share capital the non-controlling interest owns.

Question 2

How to calculate Goodwill arising on consolidation when there is non-controlling interest?

Answer 2

Fair value of consideration transferred + fair value of non-controlling interest at date of acquisition - fair value of net assets at the date of acquisition

Question 3

How is the amount owing to non-controlling interest calculated?

Answer 3

Fair value of NCI at date of acquisition+ NCI share of post-acquisition profits.

NCI are entitled to a share of Goodwill arising from consolidation.

Question 4

How are inter-entity transactions dealt with on the consolidated accounts?

Answer 4

• Receivables and payables between the parent and subsidiary are not included, only the ones from outside the group.
• Profit is only recorded from sales outside the group

Question 5

How are sales at a profit within the group dealt with when some of the goods are still in inventory by the end of the year on the Consolidated SoFP?

Answer 5

• Calculate the unrealised profit in inventory
• Reduce inventory and retained earnings by the amount of realised profit in the company that sold the goods to the other.