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

MmeFroggy
MmeFroggy Registered Posts: 8
in AAT Level 4 (Level 8 in Scotland)
Hi, could someone help me understand how to calculate the non-controlling interest in Task 6? Thank you

Comments

  • AATClare
    AATClare Registered Posts: 2
    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
    MmeFroggy Registered Posts: 8
    Fantastic! Thank you very much AATClare :)
  • sandy78
    sandy78 Registered Posts: 3
    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
    sandy78 Registered Posts: 3
    Hi but I don't get the answer which is 435...
  • MmeFroggy
    MmeFroggy Registered Posts: 8
    Thanks Sandy :)
  • AATClare
    AATClare Registered Posts: 2
    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 :)

Categories

Privacy Policy