COMMERCE 4AC3 Chapter 4: Consolidation of Non-wholly Owned Subsidiaries

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Non-wholly owned subsidiaries (<100% of the subsidiary is acquired) Shares not acquired by the parent are owned by other shareholders, who are referred to as non-controlling shareholders. Value of the shares attributed to the non-controlling shareholders when presented on the consolidated statements, is referred to as non-controlling interest (nci) Nci represents an additional set of owners who have legal claim to the subsidiary"s net assets. How is nci measured and presented on the financial statements. Views the consolidated entity from the standpoint of the shareholders of the parent company. Sets up goodwill as the amount parent paid given purchase price. Consolidated statements do not acknowledge or show the entity of the nci. Similar to proprietary in that the focus of the consolidated statements is directed towards the shareholder of the parent company. Nci is recognized and reflected as a liability in the consolidated balance sheet (based on the carrying amount (bv) of the net assets of the subsidiary)

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