Topic 7 - NCI

Question 1

which approach do we need to take when applying NCI consolidation?

Answer 1

the entity concept

Question 2

What is the entity concept?

Answer 2

The group consists of ALL the assets & liabilities of the parent AND the subsidiary and the NCI is an equity participant of the group

Question 3

What are the two ways that NCI can be measured in the acquisition analysis?

Answer 3

• Full goodwill method, vs.

* Partial goodwill method

Question 4

do BCVR enteries change in consolidation?

Answer 4

only if partial goodwill method is used

Question 5

do pre acquisition elimination entries change?

Answer 5

yes only eliminate parents share

Question 6

do intra group transaction eliminations change?

Answer 6

no, except for dividends only elimination parents share

Question 7

explain the difference between
• Full goodwill method, vs.
• Partial goodwill method

Answer 7

Full goodwill: includes goodwill for both parent and NCI

Partial goodwill: only include goodwill of parent

Question 8

If you use the partial goodwill method, how is it recorded in BCVR?

Answer 8

you don’t, just include it as a separate line in the elimination entries.