Question

Describe how total noncontrolling interest at the end of an accounting period is determined. (NOT just a chart from the textbook solutions)

Answer 1

In order to understand how to determine non controlling interest. let us first understand what is non controlling interest.

Non controlling interest is also can be referred as minority interes.

1. It is that part of net asset of the subsidiary which is not owned by parent company either directly or indirectly

2. It represents the claim of outside shareholders of subsidiary.

3. NCI should be presented in the consolidated balance shee, separately from liabilities and the equity of parent/ holding company shareholder. It is shown after share application money as separate head.

How to calculate non controlling interest.?

XX ADD: Calculation of non-controlling interest Capital Share of minorities Capital profits ( portion of minorities) Revenue profits (portion of minoritiel) m preference share Capital iñat part which preference share dividend is not held by XX Parent co. NON CONTROLLING INTEREST XX Let us Understand this with the help of an example

Example :- Balance sheet of Subsidiary "000" "000 Amount & Amount $ Equity share Capital (Face value $1000) 5,000 per Reserves & Surplus: General reserve 1,000 1,000 2,000 Profit & Loss current Ulabilities & provisions: Trade payables 1000 TOTAL EQUITS & LIABIUTIES 8000 NON CURRENT ASSETS Land & building 7000

CURRENT ASSETS Trade Receivables 1000 TOTAL ASSET 8000 4. HOLDING company holds 4000 shares of Subsidiary co. 2 $500 'were transferred to reserves at the end of year solution To teel number of shares Holding company has Non controlling minority holdere e 1000 Shares 5000 Shares 4000 Shares MO je 20%

ADD: Calculation of non-controlling Interest figures in oo" Capital Share of minorities [207 of $5000] $ 1000 Capital profits [207. of opening reservee ice sooj $ 100 Revenue Profits [204.09 profits during year ive 1500] $ 300 NON CONTROLLING INTEREST $1,400 working note # Calculation of opening reserved Closing reserves $ 1000 profits transferred at end $500 opening reserves $ soo

# calculation of profits during year Closing profits $ 1000 Add: profits trous peceed to reserves $ 500 Less: opening profits (assumed) profits derning the year $1500.