Help with the Financial Statements Sample Assessment 1- Non-controlling interest

MmeFroggy

Hi, could someone help me understand how to calculate the non-controlling interest in Task 6? Thank you

AATClare

Hello,

The way to calculate the Non-Controlling Interest (NCI) is like this:-
Work out the percentage NCI first

Take the Share Capital of the Subsidiary at reporting date, X the percentage attributable to the NCI
Add Share Premium of the Subsidiary at reporting date, X the percentage attributable to the NCI
Add Revaluation Reserve at reporting date, X the percentage attributable to the NCI
Add Retained Earnings at reporting date, X the percentage attributable to the NCI

Less Provision for Unrealised Profit (if there is any) (which is where there are goods sold inter-company but a percentage of goods have been sold to a third party)

I hope this helps

MmeFroggy

Fantastic! Thank you very much AATClare

sandy78

AATClare said:

Hello,

The way to calculate the Non-Controlling Interest (NCI) is like this:-
Work out the percentage NCI first

Take the Share Capital of the Subsidiary at reporting date, X the percentage attributable to the NCI
Add Share Premium of the Subsidiary at reporting date, X the percentage attributable to the NCI
Add Revaluation Reserve at reporting date, X the percentage attributable to the NCI
Add Retained Earnings at reporting date, X the percentage attributable to the NCI

Less Provision for Unrealised Profit (if there is any) (which is where there are goods sold inter-company but a percentage of goods have been sold to a third party)

I hope this helps

sandy78

Hi but I don't get the answer which is 435...

MmeFroggy

Thanks Sandy

AATClare

sandy78 said:

AATClare said:

Hello,

The way to calculate the Non-Controlling Interest (NCI) is like this:-
Work out the percentage NCI first

Take the Share Capital of the Subsidiary at reporting date, X the percentage attributable to the NCI
Add Share Premium of the Subsidiary at reporting date, X the percentage attributable to the NCI
Add Revaluation Reserve at reporting date, X the percentage attributable to the NCI
Add Retained Earnings at reporting date, X the percentage attributable to the NCI

Less Provision for Unrealised Profit (if there is any) (which is where there are goods sold inter-company but a percentage of goods have been sold to a third party)

I hope this helps

Hi Sandy

This is because there is a revaluation of £200,000 which has to be accounted for too.

So:

We take 30% (NCI percentage) x 1000 for the Subsidiary's Share Capital at reporting date
30% x 250 Subsidiary's Retained Earnings at reporting date
and finally 30% x 200 Subsidiary's Revaluation Reserve working at reporting date

And so this comes to:

1000x30% = 300
250x30% = 75
200x30% = 60

added together, this equals 435.


I hope this helps