Question

when the subsidiary is less-than-wholly owned and there is a differential, how does the consolidation process differ?

Answer 1

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Answer: there Requirement: When is a the subsidiary is less differential, how does than wholly owned and the consolidation process when assets date : the acapustion - the book values are not casual the fair values for all en kabilities of the acquired company at the acquistion The difference between the book value of the net assets of the acquired company is the total fair values of consideration given up by the acquirer & the non-controlling interest (N(I) is called "differential". The differential is allocated to the corresponds y assets/ liabilities that cause the differential and amortized over a is considered differential my remaining does not de to be good will. the acquirer's Note that donerstup the differential percentage. The consolidated amount for each asset cor) liability = parents book value & subsidiary's book value & unamortized differential attributable to the asset Iliability. parent's restment in Subsidiary account will not appear on the consolidated balance Sheet, ie, it is eliminated in the consolidating process, ie, replaced by the subsidiary's assets & liabilities it represents Consolidated total assets (CTA) - Book value of parent company's own total assets (ie, excluding investment in subsidiary which is eliminated in the consolidation process) + Book value of subsidiary's total asets & unamortized differential attributable to all assets. Alternatively, if parent uses equity method to account for its investorcat in the subsidiary, CTA - Book value of parent company's own total assete (ie excluding investment in subsidiary) A investment in subsidiary & Nes & fair value of total subsidiary's tiabitities.

- Consolidated total liabilities & Book value of parent company's total liabilities & Book value of subsidiarys total liabilities & Chamortized differential attributable to all liabilities. consolidated total stockholders equity (CTE) = parent company's total Stockholders egoity & Nch. The subsidiary Stockholder's equity accounts are eliminated in the consolidation process. consolidated revenues & expenses eaual the sums of like revenues (except for income from subsidiary which is eliminated) and (like expenses & amortized differentials). Consolidated met income (CNI) = parent's own income (re excluding income from Subsidiary + subsidiary's net income - amortized differentials. NCT in CNi - N e ownership percentage & (Subsidiary's net income - amortized differentials). Controlling interest in NL = CNE- NCE inCNI – parent's own income & parent's Ownershup percentage & (subsidiary's net amortized differentials).