Consolidation Less than 100% Ownership

Question 1

Where does noncontrolling interest appear on the financial statements

Answer 1

1) Income Statement- net income attributable to noncontrolling interest
2) Balance sheet- Equity attributable to noncontrolling interest

Question 2

What is the calculation of noncontrolling interest equity?

Answer 2

S’s net book value (at the end of the year)
Plus: 100% of the FV Increment
Less: Accumulated depreciation/amort of FV Incrament
Less: Goodwill impairment loss
Equals: S’S adjustment NBV
Multiply: % ownership of S
Equals NCI Equity:

NOTE: THE FV INCREMENT IS EQUAL TO THE CONSIDERATION LESS NBV!! (NOT JUST THE DIFFERENCE BETWEEN NFV AND NBV)

Question 3

What is the calculation Income to Noncontrolling Interest?

Answer 3

S'S Net Income 
Less:  Depreciation / Amortization of differential 
Less:  Goodwill impairment Loss 
Equals:  S'S adjusted net income 
Multiply: % of ownership of S 
Income to NCI

Question 4

How can you identify the beginning noncontrolling interest for equity from the decomposition tool?

Answer 4

Fair Value on the noncontrolling interest portion or the total fair value of the entity * NCI %

Subsequent years: Take beginning balance + NCI Portion of their net income + Portion of Dividends Paid