Professional Documents
Culture Documents
2.
60%
B Ltd
C Ltd
A Ltd 80%
DNCI 20%
A Ltd 48%
DNCI 40%
INCI 12%
Explain the difference in the calculation of the direct and indirect NCI.
Direct NCI receive a share of all equity of the subsidiary while indirect NCI
receive a share of only post-acquisition equity.
In adjusting the NCI for the effects of intragroup transactions, generally there
is no difference between INCI and DNCI. However where dividends are
paid/payable by a subsidiary containing an INCI, adjustments are necessary to
ensure no double counting occurs.
PRACTICE QUESTIONS
Note: In Questions 19.1 19.6, at the acquisition date the identifiable assets and
liabilities of the subsidiary are recorded at amounts equal to fair values. In
Questions 19.7 19.16, these have carrying amounts different from fair values.
Question 19.1
CANADA LTD CHINA LTD CHILE LTD
80%
Canada Ltd
75%
China Ltd
Chile Ltd
Dr
Dr
Dr
Cr
800
64 000
4 000
68 800
Dr
Dr
Dr
Cr
200
16 000
1 000
17 200
Dr
Cr
1 900
1 900
Dr
Cr
400
NCI
Dr
Cr
1 600
Dr
Cr
900
Dividend declared
(20% x $8 000
NCI
NCI Share of profit
(20% x 75% x $6000)
400
1 600
900
Dr
Dr
Cr
3 000
45 000
48 000
Dr
Dr
Cr
1 000
15 000
16 000
Dr
Cr
2 250
2 250
Dr
Cr
1 350
1 350
Dr
Cr
375
Dr
Cr
225
NCI
Dr
Cr
1 500
Dividend payable
Final dividend declared
(80% x $8 000)
Dr
Cr
6 400
Dividend revenue
Dividend receivable
Dr
Cr
6 400
Dividend payable
Final dividend declared
(75% x $6 000)
Dr
Cr
4 500
Dividend revenue
Dividend receivable
Dr
Cr
4 500
375
INCI share
Dividend declared
(25% x $6 000)
225
1 500
6 400
6 400
4 500
4 500
Dr
Cr
800
Dr
Cr
240
Dr
Cr
112
Accumulated depreciation
Depreciation expense
Retained earnings (1/7/11)
Dr
Cr
Cr
120
Dr
Dr
Cr
24
12
Dr
Dr
Cr
5.6
11.2
800
240
112
13. Depreciation
80
40
36
16.8
Dr
Cr
Cr
4 000
Dr
Cr
240
Dr
Cr
224
3 200
800
240
224
Question 19.5
PAKISTAN LTD PERU LTD PHILIPPINES LTD
75%
Pakistan Ltd
60%
Peru Ltd
Pakistan Ltd 75%
DNCI
25%
Philippines Ltd
Pakistan Ltd 45%
DNCI
40%
INCI
15%
Dr
Dr
Dr
Dr
Cr
900 000
375 000
600 000
25 000
1 900 000
Dr
Dr
Dr
Cr
300 000
125 000
200 000
625 000
Dr
Cr
275 000
275 000
Dr
Cr
135 000
General reserve
Transfer to general reserve
(25% x $50 000)
Dr
Cr
12 500
NCI
Dr
Cr
40 000
Dr
Cr
50 000
Dr
Cr
13 500
Dr
Cr
12 000
Dividend paid
(25% x $160 000)
NCI
Dividend declared
(25% x $200 000)
NCI
NCI share of profit
(25% x 60% x $90 000
Dividend declared by Philippines Ltd,
in current period)
NCI
NCI share of profit
(25% x 60% x $80 000
Dividend paid by Philippines Ltd,
in current period)
135 000
12 500
40 000
50 000
13 500
12 000
=
=
=
=
=
=
$1 660 000
$1 100 000
40% x $1 660 000
$664 000
$1 764 000
$104 000
Dr
Dr
Dr
Dr
Cr
300 000
396 000
300 000
104 000
1 100 000
Dr
Dr
Dr
Cr
200 000
264 000
200 000
664 000
Dr
Cr
248 000
Dr
Cr
93 000
248 000
93 000
Dr
Cr
124 000
Dr
Cr
46 500
General reserve
Transfer to general reserve
(55% x $40 000)
Dr
Cr
22 000
NCI
Dr
Cr
32 000
Dr
Cr
36 000
Dividend paid
(40% x $80 000)
NCI
Dividend declared
(40% x $90 000)
124 000
46 500
22 000
32 000
36 000
Dr
Cr
120 000
Dr
Cr
48 000
Dividend payable
Dividend declared
(75% x $200 000)
Dr
Cr
150 000
Dividend revenue
Dividend receivable
Dr
Cr
150 000
Dividend payable
Dividend declared
(60% x $90 000)
Dr
Cr
54 000
Dividend revenue
Dividend receivable
Dr
Cr
54 000
120 000
48 000
150 000
150 000
54 000
54 000
Dr
Dr
Cr
10 500
4 500
Dr
Cr
2 625
15 000
2 625
Dr
Cr
Cr
9 000
Dr
Dr
Cr
900
1 800
Dr
Dr
Cr
525
1 050
6 000
3 000
2 700
1 575
Dr
Cr
Cr
3 000
Dr
Cr
1 155
900
2 100
1 155
10
Pakistan
Ltd
2 850 000
420 000
Total revenue
Cost of sales
Other expenses
Total expenses
Profit before tax
Tax expense
Profit
3 270 000
1 410 000
200 000
1 610 000
1 660 000
580 000
1 080 000
Peru
Philippines
Ltd
Ltd
1 100 000
880 000
200 000
60 000 9
10
11
12
1 300 000
940 000
520 000
380 000 17
80 000
110 000
600 000
490 000
700 000
450 000
160 000
140 000 15
540 000
310 000
Retained earnings
(1/7/12)
4 070 000
2 300 000
1 120 000 1
5
13
15
5 150 000
2 840 000
1 430 000
Adjustments
Dr
Cr
3 000
3 000
900 000
300 000
10 500
1 800
NCI
Parent
Dr
Cr
135 000
124 000
46 500
525
300 000
275 000
200 000
248 000
93 000
1 050
1 155
13 500
12 000
1 155
4
4
18
1 278 630
2 625
14
5 170 220
4 830 000
308 000
120 000
48 000
150 000
54 000
900
Group
900
6 000
2 100
5 138 000
2 313 000
15 387 000
2 700 000
2 438 000
17 880 000
1 558 000
15 6 285 800
17
7 843 800
4
8
8
16
2
3
6
7
7
16
18
6 448 850
11
Dividend paid
400 000
160 000
80 000
Dividend
declared
Transfer to
general reserve
400 000
200 000
90 000
100 000
50 000
40 000
190 000
900 000
4 250 000
310 000
2 430 000
210 000
1 220 000
1 148 000
6 695 800
Retained earnings
(30/6/13)
48 000
120 000
150 000
54 000
10
9
11
12
472 000
486 000
40 000
32 000
50 000
36 000
12 500
22 000
4
8
4
8
4
8
400 000
400 000
155 500
955 500
5 493 350
12
PAKISTAN LTD
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2013
Revenue:
Sales revenue
Other revenue
$4 830 000
308 000
5 138 000
Expenses:
Cost of sales
Other expenses
2 313 000
387 000
2 700 000
2 438 000
880 000
$1 558 000
$1 558 000
$1 278 630
279 370
$1 558 000
PAKISTAN LTD
Consolidated Statement of Changes in Equity (extract)
for the year ended 30 June 2013
Consolidated
Parent
$1 558 000
$1 278 630
$6 285 800
1 558 000
(472 000)
(486 000)
(190 000)
$6 695 800
$5 170 220
1 278 630
(400 000)
(400 000)
(155 500)
$5 493 350
13
Question 19.8
VANUATU LTD VIETNAM LTD BRUNEI LTD
80%
Vanuatu Ltd
75%
Vietnam Ltd
Vanuatu Ltd 80%
DNCI
20%
Brunei Ltd
Vanuatu Ltd 60%
DNCI
25%
INCI
15%
=
=
=
=
=
=
=
Dr
Dr
Inventory
Deferred tax liability
Business combination valuation reserve
Dr
Cr
Cr
1 500
450
Cr
1 050
1 500
450
1 050
14
Dr
Dr
Dr
Dr
Dr
Dr
Cr
3 840
25 600
2 560
6 240
1 680
2 280
Dr
Cr
840
Dr
Dr
Dr
Dr
Dr
Cr
960
6 400
640
1 560
420
42 200
840
9 980
Dr
Cr
1 326
Dr
Cr
210
Dr
Cr
300
Dr
Cr
1 326
210
300
320
320
15
Dr
Cr
4 000
1 200
Cr
2 800
Cr
Dr
Dr
Dr
Cr
Dr
Cr
2 400
2 100
15 000
600
15 300
2 100
2 100
Dr
Dr
Cr
Cr
5 000
700
800
4 900
16
Dr
Cr
1 355
Dr
Cr
813
1 355
813
Dr
Cr
700
700
Dr
Cr
250
Dr
Cr
250
Dr
Cr
750
250
250
$750
Dividend revenue
Dividend paid
750
=
=
$1 280
$ 750
$2 030
Dividend payable
Dividend declared
Dr
Cr
2 030
Dividend revenue
Dividend receivable
Dr
Cr
2 030
2030
2 030
Dr
Cr
Cr
43 200
Dr
Cr
405
41 850
1 350
405
17
Dr
Cr
189
189
37 800
Cost of sales
Inventory
Dr
Cr
Cr
Dr
Cr
338
Dr
Cr
315
36 675
1 125
338
315
18
Financial
Statements
Sales revenue
Vanuatu
Ltd
108 000
Vietnam
Ltd
72 000
Brunei
Ltd
54 000
72 000
61 200
40 500
Dividend revenue
36 000
9 000
27 000
1 280
10 800
2 700
8 100
1 500
13 500
2 880
10 620
-
28 280
8 480
9 600
1 920
10 620
2 400
Profit
19 800
7 680
8 220
6 400
4 800
(3 200)
3 840
2 400
6 560
2
6
840
2 100
1 050
2 800
1
5
910
26 200
4 000
4 000
12 480
1 600
5 020
1 000
1 000
8 000
18 200
1 600
10 880
2 000
3 020
Cost of sales
D&A expenses
Retained earnings
(1/7/12)
Transfer from BCVR
Dividend paid
Dividend declared
Retained earnings
(30/6/13)
11
13
1
5
9
10
Adjustments
Dr
Cr
43 200
37 800
1 500
41 850
4 000
36 675
Group
NCI
Dr
Parent
Cr
153 000
11
13
100 675
52 325
14 580
37 745
--
750
2 030
450
1 200
405
338
1
5
11
13
37 745
10 407
27 338
750
2 030
9
10
34 808
4 250
4 570
8 820
25 988
4
8
8
3
1 326
1 335
813
960
4
8
210
700
300
189
315
800
4
12
14
7
24 668
6 400
0
250
320
250
8
4
8
31 068
4 000
4 000
8 000
23 068
19
VANUATU LTD
Statement of Profit or Loss and Other Comprehensive Income
for the financial year ended 30 June 2013
Sales revenue
Expenses:
Cost of sales
Other
$153 000
100 675
14 580
115 255
37 745
10 407
$27 338
$27 338
$24 668
$2 670
VANUATU LTD
Consolidated Statement of Changes in Equity (extract)
for the year ended 30 June 2013
Consolidated
Parent
$27 338
$24 668
$6 560
27 338
910
(4 250)
(4 570)
$25 988
$6 400
24 668
0
(4 000)
(4 000)
$23 068
20