# FNST - Expert required please!

Registered Posts: 96 Epic contributor 🐘
Ok, here goes. If anyone could help me here, I would gladly appreciate it.

The answer they got was £160,000 and this sort of question usually forms part of a consolidated statement of financial position, but in this case it didn't. It was a small question in a Osbourne book.

The Issued share capital of Brooker limited consists of 500,000 ordinary shares of 50 pence each. The reserves of the company currently total £150,000.

Huhne Plc owns 300,000 ordinary shares in Brooker Limited.

What is the value of the NCI?

Now, I think, That the parent shareholding is 300/500 is 60%, so the NCI holding is 40%.

I also know that to calculate the NCI you take that percentage and multiply it by the share capital and retained earnings, but cannot get £160,000!

I also get confused when the share capital composition is not £1 per share.

I've been doing this a week but hate not knowing how they got to the answer!

• Registered Posts: 2,525 Beyond epic contributor 🧙‍♂️
Hello

I think (but may be wrong) that you need to adjust the number of 500,000 ordinary 50p shares to make them £1

Once this is completed the calculation would be:

250,000 (£1 ord. shares) + £150,000 (Reserves) = 400,000

400,000 * 40% = 160,000

Hope this helps.

JC
~ An investment in knowledge always pays the best interest ~
Benjamin Franklin
• Registered Posts: 96 Epic contributor 🐘
Thanks so much.

I knew that the answer involved 400,000, by dividing 160,000 by 0.40, and in essence working it backwards, but couldn't figure it out!

I'm learning everyday.

Really appreciate that.

thanks again.
• Registered Posts: 997 Epic contributor 🐘
Hi

I don't think you need to turn the issued share cap into £1 shares because the maths work fine using the numbers in the Q (ordinarily you wouldn't have to adjust the composition of the issued share capital). 500,000 shares at 50p per share comes to £250k (as per Jo Clark's post above).

All the best
Steve
• Registered Posts: 2,525 Beyond epic contributor 🧙‍♂️
Thanks for clarifying and explaining it better than I did Steve
~ An investment in knowledge always pays the best interest ~
Benjamin Franklin
• Registered Posts: 997 Epic contributor 🐘
Actually, Jo, I thought your explanation was fantastic and so did the OP. Lots of people struggle with NCI's and you summed it up really nicely.

All the best
Steve
• Registered Posts: 96 Epic contributor 🐘
Thanks guys!