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essay needed write your answer in the space provided or on a separate sheet of paper....

essay needed

write your answer in the space provided or on a separate sheet of paper.

Where should a noncontrolling interest appear on a consolidated balance sheet?

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Answer #1

If all the shares of a subsidiary is not acquired by the holding company but acquired more than 50% but less than 100% shares, then the non-acquired shares become non-controlling interest.

Example: If 75% is acquired then (100 – 75 =) 25% shares of subsidiary become non-controlling.

It could be reported as non-current liability or could be a part of equity in the parent company’s consolidated balance sheet. This rule is applicable under the US GAAP.

In case of IFRS, the non-controlling interest or minority interest is recorded only on the equity section by separating from parent’s equity.

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